Slide 1: FY21 Results Presentation
FY21 Results Presentation CEO Daniel Riley 26 August 2021 CFO Steve Shin COO James Beeson
Slide 2: Vision Statement
Vision Statement Business Finance made simple. At Earlypay, our mission is to provide Australian businesses with the cash flow they need to grow. 2
Slide 3: About Earlypay
About Earlypay Employing ~90 people in Brisbane, Sydney and Melbourne, Earlypay provides secured finance to SME businesses in the form of: Invoice Finance Equipment Finance Line of credit, secured by client’s invoices. It is an ongoing, flexible working capital Loans range from $20,000 to $1,500,000
Slide 4: FY21 Highlights
FY21 Highlights Record earnings in H2’21 with guidance of 40%+ growth in FY22 Exceeded FY21 guidance Despite Covid - Default rate <0.1% $8.7m $21.0m (up 13% on pcp) (up 11% on pcp) Servicing 3,000+ SMEs (0.1%+ of total SMEs) Underlying NPATA¹ Adjusted EBITDA¹ Avg. Cost of Debt 4.24% down from 5.24%
Slide 5: Growth resumed in H2'21 – post-COVID
Growth resumed in H2’21 – post-COVID Growth has resumed with consistent trading H2 H1 Adjusted EBITDA ($m) FY16 - FY21 CAGR 32% above pre-COVID levels 20.4 21.0 19.0 Impacted by COVID 17.6 • Earlypay has achieved substantial growth over the 9 halves to H1’21 which was Record HY earnings 13.1 10.3 8.
Slide 6: Growth Drivers
Growth Drivers Earlypay’s online platform and expanded sales capability are driving growth in lending volume Assessment • Online sales are driving overall growth in the core Invoice Finance product, lifting Earlypay’s organic growth rate and transaction volumes to record levels. • Earlypay’s digital
Slide 7: Consolidated Profit & Loss
Consolidated Profit & Loss $m FY20 FY21 Δ pcp Invoice Finance Equipment Finance 30.8 11.5 28.3 14.0 -8% 22% Earlypay’s earnings growth is recognition of investment in Underlying Revenue¹ 42.2 42.3 0% the business’ technology platform which has reduced the Other /Corporate 5.3 1.5 -71% Group Revenue
Slide 8: Consolidated financial position
Consolidated financial position $m FY20 FY21¹ Pro Forma Earlypay maintains a strong balance sheet with $44.8m of Cash and cash equivalents 38.2 44.8 cash as at 30 June 2021 Receivables - Debtor Finance 167.7 199.7 Trade and other receivables 1.1 0.7 • $44.8m cash provides substantial headroom to aid
Slide 9: Consolidated cashflow statement
Consolidated cashflow statement $m FY20 FY21¹ Pro Forma Earlypay generated positive net operating cash Receipts 54.0 53.3 flow of $4.8m for FY21 Payments (40.0) (38.6) Income taxes paid (3.3) (1.5) • Receipts driven by interest earned on both the invoice and equipment financing loan Net Finance Cost
Slide 10: Invoice Finance Division
earlypay~ nvoice Finance Division earlypay®
Slide 11: Invoice Finance – snapshot
Invoice Finance – snapshot Strong recovery in transaction volumes in Q4 from the $m FY20 FY21¹ Pro Forma Δ pcp reduced demand caused by the government’s SME Key Metrics stimulus in H1’21 Total Transaction Volume (TTV) 1,709 1,864 9% Margin % (Avg. over year) 1.79% 1.54% -14% • The business has demon
Slide 12: Invoice Finance – TTV, Revenue and Margin
TTV X Margin = Revenue Invoice Finance – TTV, TTV Margin % Revenue and Margin Total Transaction Volume ($m) 600 vs. Margin % 2.2% 519 481 2.0% 500 490 458 420 407 406 392 1.8% 400 1.78% 1.78% Transaction volume uplift is driving revenue growth, 300 1.63% 1.51% 1.60% 1.56% 1.6% 1.47% improving margin
Slide 13: Invoice Finance – Net Interest Margin improving
Invoice Finance – Net Interest Product Return* - Interest Cost = Net Interest Margin Margin improving Invoice Finance - Net Interest Margin % Return Net 40% 35% 30% Recent improvements across all three funding 25% facilities have improved Earlypay’s Net Interest 20% 15% Margin (NIM) 10% Q1 Q2 Q3 Q4
Slide 14: Invoice Finance – client acquisition
Invoice Finance – client acquisition Earlypay’s online strategy driving a sharp increase in customer numbers and transaction volume TTV Active Customers • Earlypay’s online strategy continues to drive growth with over 90% of all new Invoice Total Transaction Volume ($m) 600 vs. Active Customers 460
Slide 15: Equipment Finance Division
Equipment Finance Division 15
Slide 16: Equipment Finance – snapshot
Equipment Finance – snapshot $m FY18 FY19 FY20 FY21 Key Metrics Revenue ($m) 1.1 3.4 11.5 14.1 The Equipment Finance Division now generates an Net Interest Margin (NIM) % NM NM 11.3% 10.3% EBITDA margin in excess of 60% EBITDA ($m) 0.3 1.6 5.7 8.6 EBITDA Margin % 24% 47% 50% 61% • Revenue up 23% on
Slide 17: Equipment Finance – originations & NIM
Equipment Finance – 140 Loan book Originations Equipment Finance Loan book & Originations ($m) 16 originations & NIM 14.9 120 14 120 115 11.8 107 12 100 97 93 91 95 91 9.8 10.6 10 9.6 8.7 Earlypay is positioned for growth in origination 80 8 60 volumes, with increased sales resourcing and 40 5.6 6 4
Slide 18: Debt Profiling
Debt Profiling Interest Invoice Finance - Interest Cost % 6% Warehouse Facilities position Earlypay for solid growth 5% $m FY18 FY19 FY20 4% Invoice Finance 3% Warehouse Facility 1 $100m $90m Sub-3% Warehouse Facility 2 $35m $4m Sub-3% 2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Mezzanine $9m $2m Sub-8% FY20 FY21 Eq
Slide 19: Sector exposure
Sector exposure Earlypay supports a wide variety of Aussie businesses and has had a default rate of less than 0.1% Invoice Finance Equipment Finance Sector Split By TTV Sector Split By Loan Book Wholesale Trade Retail Trade Construction/Infrastructure Manufacturing Transport, Postal & Warehousing Tr
Slide 20: Outlook
Outlook Earlypay expects 40%+ increase in NPATA for FY22, underpinned by Invoice Finance Invoice Finance The key driver of earnings growth for FY22 is Invoice Finance, with; • A significantly improved earnings base compared to the start of FY21 • A strong organic growth profile • Margin improvement
Slide 21: Technology
Technology By embracing innovation and new technologies, Earlypay has streamlined its operations and renewed its ‘customer first’ approach Watch Video 21
Slide 22: Technology to expand distribution
Technology to expand distribution Broker portal facilitates client referrals, with transparency on transaction progress and commissions earned 22
Slide 23: Disclaimer
Disclaimer This presentation (”this Presentation”) has been prepared by Earlypay Limited [ACN 098 952 277] (“EPY” or the “Company”) and is dated 26th August 2021. Summary information This presentation contains summary information about the current activities of EPY as at the date of this Presentatio
Slide 24: FY21 Results Presentation
FY21 Results Presentation CEO Daniel Riley 26 August 2021 CFO Steve Shin COO James Beeson