Propel Holdings, Inc. · TSX:PRL
Propel — Investor Presentation (November 2022)
33 slides from Propel's investor presentation, Nov 10, 2022
Slide 1: Investor Presentation
INVESTOR PRESENTATION TSX:PRL November 10, 2022
Slide 2: Disclaimer
Disclaimer FORWARD-LOOKING INFORMATION Certain statements made in this presentation may constitute forward-looking information under applicable securities laws. These statements may relate to our financial and operating targets for fiscal 2022 and 2023 and the launch into Canada in Q4 2022. Such sta
Slide 3: Investment Highlights
Investment Highlights Consumer-focused fintech lending platform Leading-edge, AI-driven, agile tech infrastructure unlocking credit market opportunity Innovative, transparent products and services, including 3 transformational bank programs and Lending as a Service (LaaS) partnership Profita
Slide 4: Our Mission
OUR MISSION Inclusion Evolution Experience Every individual deserves Help consumers evolve to better Provide a best-in-class access to credit credit products over time consumer experience We facilitate access to credit for underserved consumers through our belief that every individual deserves credi
Slide 5: More than 25% of U.S. adults are unable to afford a $400 emergency expense
More than 25% of U.S. adults 3 in 10 U.S. adults are unable to afford a experience hardships due to $400 emergency expense1 income volatility2 Despite regulatory encouragement, +60M U.S. adults lack access to traditional credit from mainstream credit providers, making even a small unexpected expense
Slide 6: Propel: the fintech platform helping underserved consumers access credit
PROPEL: the fintech platform that helps underserved consumers get access to the credit they need 6
Slide 7: Financial Inclusion for the Underserved Population
Financial Inclusion for the Underserved Population Mainstream Bank Credit Products Other Industry Products Online, scalable fintech offering convenient, fair and transparent access to credit with potential to build credit and NO surprise fees, DECLINED origination fees, late fees or prepayment penal
Slide 8: Propel Today
Propel Today 100% online At Scale Fintech Profitable $947M ~8.2M <10 second YTD Q3 2022 Fiscal 2021 in originations* unique applications initial credit decisions per year** Revenue 86% 76% growth 947,000 ~20,000 ~89% Adjusted $27.0M $25.4M funded loans and unique applications of applications EBITDA*
Slide 9: Products
PRODUCTS Inclusive Transparent Evolving “MoneyKey was there for me when no one else was. They helped me with the money for bills I did [not] have a clue if I could pay. I’m really thankful that they came through for me.” ~ Christopher, MoneyKey Customer 9
Slide 10: Brands & Products
Brands & Products Propel Brand Consumer Product Operating Structure Fully amortizing installment State-Licensed Direct Lender loans Credit Services Organization/Credit Access Business Open-ended Lines of Credit Bank Sub-servicer Open-ended Lines of Credit Bank Partner Product and service offerings a
Slide 11: Lending-as-a-Service (LaaS)
Lending-as-a-Service (LaaS) End-to-end solution for Pathward’s <36% APR lending product Borrower Sub-36% APR Seamless integration into Propel’s proprietary infrastructure Fee and service revenue Technology Originating bank earned for services provided to Pathward Service LaaS Partner Purchaser 1 Sal
Slide 12: Putting Consumers First
Putting Consumers First OUR TYPICAL CONSUMER: Employed Consistently Lowered Graduation Ability to Improve Financial Wellness Cost of Credit Over Time Programs Low-Moderate Income Credit Score and Education • Over the last two • Propel platform • Some programs • Financial literacy years, the cost of
Slide 13: Platform to Succeed
Platform to Succeed Convenient Seamless Mobile “I would like to thank this company for helping me through this tough time. […] they see the best in you and will help in your time of need. Thank you so much.” ~ TyJuan, MoneyKey Customer 13
Slide 14: Industry-Leading Proprietary Technology Designed for Consumer Needs
Industry-Leading Proprietary Technology Designed for Consumer Needs 65 person Major subsystems: in-house tech team proven 6-week Agile delivery cycle • Acquisition and underwriting engine (AI-powered) • Loan management system Customer self-service portal (mobile optimized) $17M+ • invested to date ~
Slide 15: Looking Beyond Traditional Credit Scores
Looking Beyond Traditional Credit Scores Our sophisticated AI-powered engine with machine learning algorithms provides opportunities for creditworthy consumers Reducing Risk as we Scale 1,000+ Attributes Evaluate Credit Worthiness $600,000,000 Fund More 16% 14% $500,000,000 Alternative Credit Bureau
Slide 16: World Class Operations Team
World Class Operations Team Relentless focus on service and performance “I believe CreditFresh helped me out in a very difficult time. They were enthusiastic, supportive, interested in my personal needs… Thank you CreditFresh!!” ~ Joseph, CreditFresh Customer Excellent 4.6 ratings from thousands of
Slide 17: Financial Overview
FINANCIAL OVERVIEW Profitable Diversified Resilient “CreditFresh accepted me when no one else would. The process was quick and easy. The loan was very helpful. Thank you.” ~ Benjamin, CreditFresh Customer 17
Slide 18: Q3 2022 Financial Performance
Q3 2022 Financial Performance US$M Total Originations Funded* +75% in Q3 2022 and +108% for YTD Q3 2022 Loans and Advances Receivable Revenue Adjusted EBITDA* $166.3 $164.3 $27.0 $25.4 $22.7 $129.6 $20.0 $103.8 $88.5 $68.0 $73.5 $59.7 $8.8 $49.8 $8.0 $32.7 $5.0 $26.4 2019 2020 2021 Q3 2022 2019 2020
Slide 19: Q3 2022 Financial Performance
Q3 2022 Financial Performance Revenue US$M Record Total Originations Funded*, Loans and Advances Receivable and Ending Combined Loan and Advance Balances* $164.3 Expansion into new states with 3 Bank Partners $129.6 Variable pricing and graduation capabilities New marketing partners and chan
Slide 20: Q3 2022 Financial Performance
Q3 2022 Financial Performance Provision for loan losses and other liabilities (“Provision”) and Net Charge-offs* Q3 2022 Provision % Revenue reflects: 75% growth in Total Originations Funded* 58% IFRS-9 requires high provision at origination, 49% 53% 54% without commensurate revenue 47% 47% 42
Slide 21: Q3 2022 Financial Performance
Q3 2022 Financial Performance US$M Net Income Adjusted Net Income* All metrics represent growth over prior year and record performance for a YTD period $10.1 $12.9 $11.9 $13.7 through Q3 $8.8 $7.3 $6.6 $9.2 Overall growth in revenue $4.2 Cost efficiencies $3.8 $2.0 $2.0 $2.2 Above is offset
Slide 22: Solid Financial Position
Solid Financial Position Company well funded for existing business, the launch of the Pathward and Canada growth initiatives and to support dividend Outstanding Debt Maturities (in US$M ) Increased CreditFresh credit capacity by $40 million to $160 million in Q3 2022 $160.0 MoneyKey (Capacity)
Slide 23: Growth Outlook: Operating and Financial Targets
Growth Outlook: Operating and Financial Targets Target 2022 2023 Ending Combined Loan and N/A 45% - 55% Advance Balances* Growth Rate Target Metric 2022 2023 $230 - $245 $345 - $375 Revenue million million Adjusted EBITDA Margin* 18% - 22% 25% - 30% Net Income Margin 7% - 9% 12% - 16% Adjusted Net I
Slide 24: Evolving into a Diversified Online Global Fintech Company
Evolving into a Diversified Online Global Fintech Company Adjacent products • Design, deliver and cross-sell Geographic expansion complementary • Expansion into products aligned new states and with Propel’s core jurisdictions purpose Serving lower risk markets Graduating • Extension of existing cons
Slide 25: Ready for Tomorrow
READY FOR TOMORROW Poised Focused Strategic “Excellent staff, outstanding services, affordable payment rates, very customer-friendly – CreditFresh is the best…!” ~ Linus, CreditFresh Customer 25
Slide 26: Appendix A
Appendix A s!PROPEL HOLDIN
Slide 27: Our Senior Leadership Team
Our Senior Leadership Team Clive Kinross Gary Edelstein Noah Buchman Sheldon Saidakovsky Co-Founder and President Co-Founder and Co-Founder and Chief Executive Officer Executive Vice President; Executive Vice President; President of CreditFresh Chief Financial Officer Sarika Ahluwalia Dr. Jonathan G
Slide 28: Board of Directors
Board of Directors Michael Stein Clive Kinross Peter Monaco Poonam Puri Geoff Greenwade Karen Martin Peter Anderson Mr. Stein is the founder, Co-Founder and CEO Mr. Monaco is Managing Ms. Puri is a professor of Mr. Greenwade was the Ms. Martin was the Mr. Anderson was the CEO Chairman and CEO of of
Slide 29: Appendix B
Appendix B s!PROPEL HOLDIN
Slide 30: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three Months Ended Sept 30, Nine Months Ended Sept 30, Year Ended December 31, US$ 2022 2021 2022 2021 2021 2020 2019 Net Income 4,193,631 626,044 10,083,262 8,775,498 6,562,442 7,332,388 1,994,849 Interest on Debt 2,714,756 1,212,845 5,737,791 4,124,761 5,317,923 4,0
Slide 31: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation US$ Three Months Ended Sept 30, Nine Months Ended Sept 30, Year Ended December 31, 2022 2021 2022 2021 2021 2020 2019 Net Income 4,193,631 626,044 10,083,262 8,775,498 6,562,442 7,332,388 1,994,849 Transaction Costs and Financing Costs net of - 239,826 - 270,697 1,212
Slide 32: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation As at Sept 30, As at December 31, US$ 2022 2021 2021 2020 2019 Ending Combined Loan and Advance balances 1 208,380,159 96,841,777 134,843,170 62,643,735 37,339,842 Less: Loan and Advance balances owned by third (3,171,971) (3,204,174) (4,260,648) (2,487,802) (4,125,37
Slide 33: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation US$ Three Months Ended Sept 30, Nine Months Ended Sept 30, Year Ended December 31, 2022 2021 2022 2021 2021 2020 2019 Charge-offs (31,916,477) (12,367,844) (81,878,195) (29,538,250) (46,898,488) (26,059,774) (30,146,501) Recoveries 4,762,551 1,896,699 10,916,704 4,315
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