Humm Group Limited · ASX:HUM
Humm — Investor Presentation (August 2020)
60 slides from Humm's investor presentation, Aug 26, 2020
Slide 1: Love for humm takes off
LOVE FOR HUMM™ TAKES OFF // flexigroup Rebecca James Jason Murray Chief Executive Officer Chief Financial Officer
Slide 2: Agenda
flexigroup // Strategy Update // FY20 Results // Execution 01. Strategy update and rebrand 02. FY20 Group Financials 03. Execution and next steps 04. Appendices Agenda // 2 FLEXIGROUP // 2020
Slide 3: Strategy update and rebrand
flexigroup // Strategy Update // FY20 Results // Execution Strategy update and rebrand // 3 FLEXIGROUP // 2020
Slide 4: FY20 achievements
flexigroup // Strategy Update // FY20 Results // Execution FY20 achievements // Double digit 37% consumer 9x customer usage volume growth growth in FY20 p.a. and growing Across our simplified lines 570,000 new retail Significant increase in of business customers and 5,000 engagement with 600k app ne
Slide 5: Today
flexigroup // Strategy Update // FY20 Results // Execution Today // >> Unifying and rebranding flexigroup to our most recognised brand as the final step in our simplification journey. >> Announcing an equity raising to provide balance sheet flexibility and enable profitable and sustainable growth. >
Slide 6: humm
flexigroup // Strategy Update // FY20 Results // Execution Both the flexigroup brand and our flagship consumer brands will now be united under one name… humm 6 TM FLEXIGROUP // 2020
Slide 7: Unified
flexigroup // Strategy Update // FY20 Results // Execution Unified // Today marks a further Humm™ One year since launching, the humm™ brand is a simplification milestone to unify secures >> leader in transactions over $1,000 with strong and the proposition of interest free leadership profitable cust
Slide 8: humm: a leader in BNPL and interest free finance
flexigroup // Strategy Update // FY20 Results // Execution humm // TM A leader in buy now pay later (BNPL) and interest free finance, currently operating in Australia, New Zealand and Ireland. Australia BNPL BNPL and interest free finance (AU, NZ & IE) 3rd +37% +10% +18% Largest player in BNPL1 2.1m
Slide 9: humm Ireland BNPL
flexigroup // Strategy Update // FY20 Results // Execution humm // Since transforming the Ireland business from leasing to BNPL, we’ve TM doubled customers in FY20 with strong double-digit growth across volumes and retail partners. With many of our retail partners in Ireland also operating in the UK
Slide 10: humm single platform
flexigroup // Strategy Update // FY20 Results // Execution humm // A single platform serving everybody from Gen Z and millennial TM spenders, through to young families and SMEs. humm™ finances everything, from life’s little luxuries through to significant purchases. Buy Now. Pay Later. Everywhere. L
Slide 11: A clear rationale for the rebrand
flexigroup // Strategy Update // FY20 Results // Execution humm // The customer and retailer engagement around humm™ is delivering a loud and TM clear message. Centralising our value propositions around the humm™ brand to harness the natural synergies across our consumer and SME products. Creates a
Slide 12: Payment solutions across the shopping journey
flexigroup // Strategy Update // FY20 Results // Execution humm // TM Payment solutions across the entire shopping journey. CONSUMER SOLUTIONS (online + instore) SME SOLUTIONS Payment Maximum Little Big solution limit things things Description >> 2 weeks to repay, snooze for an extra 2 <$1,000 ü >>
Slide 13: Strong growth in BNPL
flexigroup // Strategy Update // FY20 Results // Execution // Strong growth in BNPL across Australia, New Zealand and Ireland – the number of transactions have tripled, and retail partners on the platform have doubled since FY18. 65% 43% 18% 14% 34% 79% 756k 18.2k $775m 12.7k $575m $655m 458k 9.5k 2
Slide 14: BNPL product resonating
flexigroup // Strategy Update // FY20 Results // Execution // BNPL product aimed at disrupting the debit card market is resonating. In built budgeting tools support financial wellness for customers. 1,500 64% 76k Customers joining each Growth in 4Q20 Unique merchant IDs week and climbing volumes ove
Slide 15: Intuitive mobile interface
flexigroup // Strategy Update // FY20 Results // Execution Intuitive mobile interface // #7 Downloaded app in Finance* 4.7 Out of 5 App Store rating* 11.7k No. of ratings* App downloads across the 600k humm™ ecosystem *App Store figures as at 22 August 2020 for the humm™ app. 15 FLEXIGROUP // 2020
Slide 16: Significant market position to unlock value
flexigroup // Strategy Update // FY20 Results // Execution Significant market position to unlock value // humm™ Peer 1 2 Peer 2 2 Peer 3 2 Peer 4 2 Peer 5 2 9.9m Active customers 2.1m 1 2.1m 1.5m (30 June 2020) 0.3m 0.1m 56.7k 1 55.4k Active merchants 24.5k 16.1k (30 June 2020) 2.2k 0.5k $11.1b Tran
Slide 17: Strong resonance with retail partners
flexigroup // Strategy Update // FY20 Results // Execution Strong resonance with retail partners // Figures relate to BNPL FY20 transaction volumes for Australia and New Zealand. 17 FLEXIGROUP // 2020
Slide 18: Growth enabled by a common credit and insights engine
flexigroup // Strategy Update // FY20 Results // Execution Growth enabled by a common credit and insights engine // Prudent credit risk management Common credit origination engine in the current environment >> First instalment payments upfront Credit decision Creation of bespoke for all humm™ custom
Slide 19: Equity raising
flexigroup // Strategy Update // FY20 Results // Execution Equity raising // Strategic capital raising Equity raising details With our business focussed on one brand and one ambition, we are Undertaking a 1 for 3.20 pro rata accelerated non-renounceable confident that now is the time to capitalise a
Slide 20: COVID-19
flexigroup // Strategy Update // FY20 Results // Execution COVID-19 // >> humm™ benefits from a diverse business model with a product suite that spans BNPL, Revolving Credit and SME finance which BNPL 2.2% 2.3% is a significant strength in a challenging economic environment. 30+ days arrears rate Ju
Slide 21: Strategic review of FlexiCommercial
flexigroup // Strategy Update // FY20 Results // Execution Strategic review of FlexiCommercial // Commercial and Leasing Highlights Given our clear focus on BNPL +15% and long-term interest free Established >> FY20 volumes up 15% to A$338m (excludes and scalable Consumer Leasing which has ceased) an
Slide 22: FY20 Group Financials
flexigroup // Strategy Update // FY20 Results // Execution FY20 Group Financials // 22 FLEXIGROUP // 2020
Slide 23: Highlights
flexigroup // Strategy Update // FY20 Results // Execution Highlights // 2.3m 73k $2.5b Customers Retail and commercial Transaction volume (+30% YoY) distribution partners (+17%1 YoY) (+13% YoY) 3.3% $29.2m >9 times 30+ days arrears Cash NPAT2 Transactions per annum (-20bps YoY) (-62% YoY) across in
Slide 24: Financial performance
flexigroup // Strategy Update // FY20 Results // Execution Financial performance flexigroup ($m)1 FY20 FY19 v PCP% >> Cash NPAT before the COVID-19 macro overlay of $60.1m. Cash NPAT 29.2 76.1 (62%) >> Cash NPAT after the $30.9m (post tax) COVID-19 macro overlay provision of $29.2m. Non-cash items >
Slide 25: Buy Now Pay Later
flexigroup // Strategy Update // FY20 Results // Execution Buy Now Pay Later // >> Cash NPAT of $5.7m after COVID-19 macro overlay. +18% >> Volume up 18% in FY20 reflecting strong growth in Australia, New Zealand and Ireland. >> FY20 online volume in Australia increased by 172% accelerating to 262%
Slide 26: AU and NZ cards
flexigroup // Strategy Update // FY20 Results // Execution AU & NZ cards // $811m $12.1m $390m (25%) Discontinued products $10.6m Australia Cards Cash NPAT for FY20 of $1.5m with: AU Cards $610m >> Volume on continuing products increased 45%. $421m $7.5m >> Net income up 6% as portfolio matures and
Slide 27: Commercial and leasing
flexigroup // Strategy Update // FY20 Results // Execution Commercial and leasing // >> Cash NPAT of $2.2m in FY20 after COVID-19 macro overlay. (1%) >> Volume performance represents a 15% increase in Commercial $350m $347m volumes, offset by Consumer Leasing which has ceased and is Cons. Leasing $9
Slide 28: Credit risk management
flexigroup // Strategy Update // FY20 Results // Execution Credit risk management // >> BNPL: Impacted by March quarter seasonality persisting Group 4.2% 4.1% longer than usual due to COVID-19, although net loss Net losses/ANR FY19 FY20 performance subsequently returned to trend from June 2020 and t
Slide 29: Capital management
flexigroup // Strategy Update // FY20 Results // Execution Committed funding facilities providing a liquidity buffer and delivering an efficient capital management structure. Capital management // 29 FLEXIGROUP // 2020
Slide 30: Wholesale funding facilities
flexigroup // Strategy Update // FY20 Results // Execution Wholesale funding facilities // Drawn balance >> Well supported by key banking partners, with five wholesale Undrawn balance funding facilities extended since 1 January 2020. >> Long established Australian securitisation program continuing t
Slide 31: Corporate debt facilities
flexigroup // Strategy Update // FY20 Results // Execution Corporate debt facilities // Drawn balance >> Significant headroom of $130m across our corporate Undrawn balance debt facilities providing a substantial liquidity buffer. Gearing ratio % >> Net gearing1 of 29%, a material reduction of 7 perc
Slide 32: Execution and next steps
flexigroup // Strategy Update // FY20 Results // Execution Execution and next steps // 32 FLEXIGROUP // 2020
Slide 33: Executing our vision
flexigroup // Strategy Update // FY20 Results // Execution Executing our vision // A unified platform for sustainable and profitable growth. Rebrand and further Equity raising to underpin Strategic Review of simplification sustainable growth Commercial >> Focusing on our core product >> Investing in
Slide 34: Equity raising to support sustainable growth
flexigroup // Strategy Update // FY20 Results // Execution Equity raising to support sustainable growth // Equity raising Pro forma Net Cash $m flexigroup is raising additional equity capital to create greater balance sheet flexibility and to take advantage of the opportunities presented by the unif
Slide 35: Entitlement offer overview
flexigroup // Strategy Update // FY20 Results // Execution Entitlement offer overview // Equity raising with a total offer size of ~A$140 million with total underwritten amount of ~A$115 million: >> 1 for 3.20 pro-rata accelerated non-renounceable entitlement offer to existing shareholders at A$1.14
Slide 36: Equity raising timetable
flexigroup // Strategy Update // FY20 Results // Execution Equity raising timetable // Event Date¹ Trading halt and announcement of accelerated non-renounceable entitlement offer Wednesday, 26 August 2020 Institutional Entitlement Offer opens Wednesday, 26 August 2020 Institutional Entitlement Offer
Slide 37: Moving forward
flexigroup // Strategy Update // FY20 Results // Execution >> We have simplified the business. >> We have a single minded focus: interest free payments for consumers and SMEs. >> We have unified this position under our most loved brand, Moving humm™. forward // >> We are now primed for sustainable a
Slide 38: Appendices
flexigroup // Strategy Update // FY20 Results // Execution // Appendices Appendices // 38 FLEXIGROUP // 2020
Slide 39: Receivables
flexigroup // Strategy Update // FY20 Results // Execution // Appendices Receivables // BNPL Receivables $572m +11% $634m FY19 FY20 >> BNPL: Increase of 11% driven by strong volume (22)% growth of 18% on FY19. AU Cards $739m >> Australia Cards: Decrease of 22% as a result of Receivables $582m decrea
Slide 40: Financial performance
flexigroup // Strategy Update // FY20 Results // Execution // Appendices Profit and Loss ($m) FY20 FY19 v PCP % Financial performance Interest income 360 353 2% >> Cash NPAT before the COVID-19 macro overlay of $60.1m. Interest expense (89) (101) (11%) >> Cash NPAT after the $30.9m (post tax) COVID-
Slide 41: Balance Sheet
flexigroup // Strategy Update // FY20 Results // Execution // Appendices Balance Sheet ($m) FY20 FY19 v PCP % Cash and cash equivalents 158 143 10% Receivables and customer loans1 2,453 2,577 (5%) Investment in associate 14 14 4% Other assets 22 11 108% Current and deferred tax assets 47 26 77% Good
Slide 42: Operating Cash Flow
flexigroup // Strategy Update // FY20 Results // Execution // Appendices Operating Cash Flow ($m) FY20 FY19 v PCP % NPAT 21 62 (65%) Impairment loss on receivables and customer loans 145 87 66% Impairment of goodwill and other intangible assets 2 11 (86%) Depreciation and amortisation expenses 21 17
Slide 43: Responsible lending
flexigroup // Strategy Update // FY20 Results // Execution // Appendices Responsible lending // >> We acknowledge that the community has high expectations >> humm™ recognised early the need to establish a self- of us. governing Code of Practice (Code) in February 2019 and began engaging with the Aus
Slide 44: Key risks
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Key risks Key risks // 44 FLEXIGROUP // 2020
Slide 45: Key risks
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Key risks Key risks // sectors and flexigroup 's response to these challenges, could impact upon customer satisfaction and loyalty, the Introduction reputation of flexigroup and its ability to attract customers in future. An
Slide 46: Key risks
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Key risks Key risks // MANAGING GROWTH materially and adversely impact flexigroup's business, results, profitability, reputation and prospects. Financial penalties As flexigroup and its operations expand, flexigroup will be
Slide 47: Key risks
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Key risks Key risks // FUNDING RISK REGULATORY RISK Access to capital and funding is a fundamental requirement to achieve flexigroup's business objectives and to meet its flexigroup operates in highly regulated industries. C
Slide 48: Key risks
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Key risks Key risks // In particular, flexigroup is regulated by the National Credit Act and the National Credit Code in relation to its Australian FUTURE PAYMENT OF DIVIDENDS credit cards business and discontinued consumer
Slide 49: Key risks
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Key risks Key risks // In the future, these factors may cause flexigroup shares to trade at a lower price. EXCHANGE RATES flexigroup operates internationally and is exposed to exchange risk arising from movements in exchange
Slide 50: Foreign selling restrictions
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Foreign selling restrictions Foreign selling restrictions // 50 FLEXIGROUP // 2020
Slide 51: Foreign selling restrictions
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Foreign selling restrictions Foreign selling restrictions // This document does not constitute an offer of New Shares of the Company in any jurisdiction in which it would be Other than in the entitlement offer, the New Share
Slide 52: Foreign selling restrictions
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Foreign selling restrictions Foreign selling restrictions // United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United
Slide 53: Underwriting agreement summary
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Underwriting agreement summary Underwriting agreement summary // 53 FLEXIGROUP // 2020
Slide 54: Underwriting agreement summary
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Underwriting agreement summary Underwriting agreement summary // Overview of Underwriting Agreement d) (quotation) approval (subject only to customary conditions) is refused or not granted to the official quotation of all th
Slide 55: Underwriting agreement summary
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Underwriting agreement summary Underwriting agreement summary // n) (Offer Materials) a statement contained in the Offer Materials is or becomes misleading or deceptive (including by d) (market disruption) Any of the followi
Slide 56: Important notice and disclaimers
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Important notice and disclaimers Important notice and disclaimers // 56 FLEXIGROUP // 2020
Slide 57: Important notice and disclaimers
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Important notice and disclaimers Important notice and disclaimers // The following notice and disclaimer applies to this investor presentation (Presentation) and you are therefore advised to The Retail Entitlement Offer will
Slide 58: Important notice and disclaimers
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Important notice and disclaimers Important notice and disclaimers // flexigroup, its officers, employees, agents and advisers, and may involve significant elements of subjective judgement concerning the Entitlement Offer, an
Slide 59: Important notice and disclaimers
flexigroup // Strategy Update // FY20 Results // Execution // Appendices // Important notice and disclaimers Important notice and disclaimers // MARKET AND INDUSTRY DATA FINANCIAL INFORMATION AND REFERENCES TO FLEXIGROUP Certain market and industry data used in connection with this Presentation may
Slide 60: Thank you
flexigroup // Strategy Update // FY20 Results // Execution Thank you // 60 FLEXIGROUP // 2020