Heartland Group Holdings Ltd. · NZX:HGH
Heartland — ASX Small and Mid-Cap Conference 2023
22 slides from Heartland's conference presentation, Sep 19, 2023
Slide 1: Heartland ASX Small and Mid-Cap Conference presentation
NZX/ASX release 19 September 2023 Heartland ASX Small and Mid-Cap Conference presentation Heartland Group Holdings Limited’s (Heartland) (NZX/ASX: HGH) Deputy Chief Executive Officer, Chris Flood, will give the attached presentation to the ASX Small and Mid-Cap Conference in Sydney tomorrow, Wednesd
Slide 2: Heartland Group Holdings Limited
Heartland Group Holdings Limited For personal use only (NZX: HGH) ASX Small and Mid-Cap Conference 20 September Page 1 2023
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by Heartland Group Holdings Limited (NZX/ASX: HGH) (the Company or Heartland) for the purpose of a management presentation. Information Forward-looking statements For personal use only The presentation (the Presentation) contains only summary informatio
Slide 4: Contents
Contents For personal use only 01 About Heartland 4 02 Investment proposition 12 03 Outlook 16 04 Appendix 19 3
Slide 5: About Heartland
For personal use only About Heartland Page 4
Slide 6: A specialist financial services group with "best or only" products
For personal use only • Heartland is an Australasian financial services group, listed on the NZX Main Board and the ASX A specialist financial services under a Foreign Exempt Listing (NZX/ASX: HGH). • Market cap in excess of NZ$1bn. group with “best or only” • “Best or only” product strategy with a
Slide 7: More than 140 years of doing things differently
More than 145 years of doing things differently Heartland’s origins date back to 1875 where it started as a small building society in New Zealand. In 2011, following the wake of the Global Financial Crisis, that building society merged with several other Kiwi financial institutions to become Heartla
Slide 8: Best or only finance
Best or only finance Rather than do what's been done, Heartland focuses on providing products that are the best or only of their kind, through scalable digital platforms. This is underpinned by the following three strategic pillars. Recognised and market leading products1 For personal use only Busin
Slide 9: Group financial highlights
Group financial highlights Impairment NPAT NIM CTI ratio ROE EPS expense ratio $95.9m 3.97% 44.9% 0.36% 10.4% 14.0 cps Reported For personal use only 0.8% vs FY2022 8 bps vs FY2022 126 bps vs FY2022 11 bps vs FY2022 169 bps vs FY2022 2.1 cps vs FY2022 $110.2m 4.00% 42.0% 0.36% 11.9% 16.0
Slide 10: AU divisional summary
AU divisional summary Household Rural Heartland Finance, Reverse Mortgages Receivables: AU$1.54bn StockCo Australia, Livestock Finance NOI: AU$47m Receivables: AU$381m For personal use only NOI: AU$32m Rural $381m, 19.8% Rural2 $32m, 40.2% $1,920m Household $79m Household AU Receivables1 $1,539m, AU
Slide 11: NZ divisional summary
NZ divisional summary Rural Household Livestock Motor Finance Receivables: NZ$191m Receivables: NZ$1.57bn NOI: NZ$7.4m NOI: NZ$64.2m Rural Rural For personal use only Rural Direct $34m, Reverse Mortgages Receivables: NZ$85m $701m, Receivables: NZ$889m 14.3% 15.1% NOI: NZ$2.6m NOI: NZ$42.4m Rural Rel
Slide 12: Investment proposition
For personal use only Investment proposition Page 11 Page 11
Slide 13: Positioned to benefit from structural tailwinds
Positioned to benefit from structural tailwinds Strong structural tailwinds are supporting Heartland’s target growth sectors in Australia.1 Reverse Mortgages Livestock Finance Motor Finance Addressable market estimated to be AU$10-15bn.2 Addressable market estimated to be AU$7bn.4 Addressable market
Slide 14: Outsized organic growth opportunity once banking licence acquired
Outsized organic growth opportunity once banking licence acquired1 Key to Heartland’s expansion in Australia is obtaining an authorised deposit-taking institution (ADI) licence. Heartland intends to do this through the acquisition of Challenger Bank, which remains subject to regulatory approvals. Su
Slide 15: Large inorganic growth opportunity in Australia
Large inorganic growth opportunity in Australia Heartland’s strong track record of successful M&A will be leveraged to actively pursue further inorganic growth opportunities. Strong track record of M&A Significant inorganic growth opportunities For personal use only Acquisitions will be explored whe
Slide 16: CTI ratio reduction initiatives
CTI ratio reduction initiatives 45.4% 46.8% 44.9% 43.6% 44.9% 44.8% 42.5% 42.0% A number of initiatives are being delivered through a systemised programme of work to enhance digital, self-service and automation capabilities across Heartland Bank in New Zealand. For personal use only FY20 FY21 FY22 F
Slide 17: Outlook
For personal use only Outlook Page 16 Page 16
Slide 18: Outlook
Outlook Business as usual growth NIM stabilisation • Heartland’s strength is its track record of strong • NIM outlook is stable with repayment and replacement of legacy lower margin growth in core lending portfolios. Motor Finance and Asset Finance loans. • Growth focus will be on Reverse Mortgages,
Slide 19: Thank you
For personal use only Thank you Investor enquiries: Nicola Foley Group Head of Communications nicola.foley@heartland.co.nz heartlandgroup.info Page 18
Slide 20: Appendix 1: Sustainability
Appendix 1: Sustainability Heartland’s sustainability framework is built on three key pillars: environment, people and financial wellbeing. Environment People Financial wellbeing • Support the just transition to a net-zero economy. • Create a pathway and place for Heartland’s people to grow, • Suppo
Slide 21: Appendix 2: Shareholder return
Appendix 2: Shareholder return • Underlying ROE of 11.9% (down 68 bps vs FY2022).1 • EPS of 14.0 cps, down 2.1 cps compared with FY2022. • Underlying EPS of 16.0 cps (down 0.3 cps vs FY2022). • Final dividend of 6.0 cps, taking FY2023 total dividend to 11.5 cps, up 0.5 cps on FY2022. • Dividend yiel
Slide 22: Appendix 3: Reconciliation of reported with underlying results
Appendix 3: Reconciliation of reported with underlying results FY2023 one-offs included in the reported result: $m FY2023 FY2022 Movement ($) Movement (%) Reported NOI 285.3 267.6 17.7 6.6% • Hedging: a $9.1 million loss was recognised in relation to derivatives that were de- Less: designated from p
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