International Personal Finance Plc · LSE:IPF
International Personal Finance — FY2022 Earnings Presentation
32 slides from International Personal Finance's earnings presentation, Mar 1, 2023
Slide 1: IPF plc 2022 full-year results
IPF plc 2022 full-year results Building a better world through financial inclusion Gerard Ryan – CEO Gary Thompson – CFO Wednesday 1 March 2023 Building a better world through financial inclusion
Slide 2: Overview: Rebuilding the bottom line – profit before tax up 14%
OVERVIEW Rebuilding the bottom line – profit before tax up 14% £77.4m £77.4m £67.7m • Significantly improved performance against a challenging backdrop 14% £35.7m* 117% • All nine businesses contributed good growth in customer Underlying lending and profitable performances • Disciplined strategy exe
Slide 3: Strong growth momentum
STRONG GROWTH MOMENTUM Excellent operational performance driving growth in all divisions 14%* • Particularly robust growth in Mexico and Australia Customer lending £1.1bn £982m • Ukraine war suppressed demand in Europe in Q1, but momentum built from Q2 2022 • Customers more cautious because of high
Slide 4: Our purpose and strategy
Source new image IPF plc 2022 full-year results Our purpose and strategy Gerard Ryan, CEO Building a better world through financial inclusion
Slide 5: A resilient business with three profitable and growing divisions
A RESILIENT BUSINESS WITH THREE PROFITABLE AND GROWING DIVISIONS Attractive long-term growth and returns prospects European home credit Mexico home credit IPF Digital • Well-established, cash • Significant growth prospects, • Strong brands, great growth generative business expanding geographic cover
Slide 6: Our strategy
OUR STRATEGY Delivering for our existing customers, making our offer attractive for the next generation Expanding product range ✓ Credit card ✓ Mobile wallet ✓ Value added services Enhancing customer experience Building distribution Investing in technology ✓ Mexico territory expansion ✓ Customer app
Slide 7: New credit card well received with great growth potential
NEW CREDIT CARD WELL RECEIVED WITH GREAT GROWTH POTENTIAL An exciting proposition tailored for both our existing and new customers • Specifically designed for Polish market • Customer representative relationship remains at the core • Providing credit card features while retaining many attributes of
Slide 8: Digitising the customer journey in Mexico
DIGITISING THE CUSTOMER JOURNEY IN MEXICO Removing friction points and enhancing our customer experience • Call centre leads delivered digitally to customer New digitally efficient processes representative’s mobile or tablet Manual 2021 • Electronic referral enables speedy appointment to meet custom
Slide 9: Expanding our geographic footprint in Mexico
EXPANDING OUR GEOGRAPHIC FOOTPRINT IN MEXICO Offers growth potential for years to come Branch expansion • Mexico expansion strategy A country of 120 million people of whom only one third are banked +5.5m +30+km Extension around • Significant long-term prospects with strong existing business demand f
Slide 10: Extending our offering to create the next generation of financial inclusion
EXTENDING OUR OFFERING TO CREATE THE NEXT GENERATION OF FINANCIAL INCLUSION Credit card Point of sale retail ProviGo loans customer app Mobile Technology wallet enabled Hybrid First Digital loans digital credit line loan Digital instalment loans Multiple Data value- added services driven Instalment
Slide 11: ESG
ESG Striving to have a positive impact on all our stakeholders • Good progress made on the Group’s environmental strategy • New development programme for all customer representatives • Partnering with Harvard University and LinkedIn Learning to deliver development programmes to colleagues Our Invisi
Slide 12: Financial performance
Source new image IPF plc 2022 full-year results Financial performance Gary Thompson, CFO Building a better world through financial inclusion
Slide 13: Target financial model
TARGET FINANCIAL MODEL Rigorous financial discipline delivering sustainable earnings and returns RORE • Three key enhancements since the half-year: 15%-20% - Returns based on RORE* - Improved target returns from 15%+ to 15%-20% - Increased dividend pay-out ratio to minimum 40% • All investment decis
Slide 14: Strong lending growth
STRONG LENDING GROWTH Group customer lending up 14% £982m £1,126m £637m £599m • European home credit: - Q1 - impact of Covid-19 and war in Ukraine 14%* 10%* - From Q2 - steady growth in demand - Q4 - proactive credit tightening for higher-risk customers 2021 2022 2021 2022 • Mexico home credit: Grou
Slide 15: Continued strong receivables growth
CONTINUED STRONG RECEIVABLES GROWTH Group closing net receivables growth of 14% * £974m £869m • Executing well on the strategy following Covid-19 £717m £669m • All divisions contributed strong performances, despite tight credit standards • Robust balance sheet with impairment coverage ratio of 36.4%
Slide 16: Strong progress against all KPIs (1)
STRONG PROGRESS AGAINST ALL KPIs (1) Annualised revenue yield Annualised impairment rate Annualised cost-income ratio 65% 25% 70% 60% 20% 65% 56% 16% 60% 60.9% 55% Target range 15% Target range 53% 14% 55% 54% 50% 51.9% 10% Target range 50% 52% 45% 5% 8.6% 45% 40% 0% 40% 2019 2020 2021 2022 2019 202
Slide 17: Strong progress against all KPIs (2)
STRONG PROGRESS AGAINST ALL KPIs (2) Profit before tax Pre-exceptional earnings per share (EPS) Dividend per share (DPS) 14% 11% 15% £114.0m 12.4p 32.2p 9.2p £77.4m 8.0p £67.7m 18.8p 20.8p £35.7m1 Underlying Reported (28.9p) - 2019 2020 2021 2022 2019 2020 2021 2022 2019 2020 2021 2022 (£40.7m) • Pr
Slide 18: Rebuilding towards target returns
REBUILDING TOWARDS TARGET RETURNS Group European home credit 40% 20% 30% Target range 14.6% 20% 21.3% 10% Target range 10% 0% 0% -10% -10% -20% -20% FY-19 H1-20 FY-20 H1-21 FY-21 H1-22 FY-22 FY-19 H1-20 FY-20 H1-21 FY-21 H1-22 FY-22 Mexico home credit IPF Digital 20% 30% Target range 15% 20% Target
Slide 19: Robust funding and capital position
ROBUST FUNDING AND CAPITAL POSITION Bonds Total debt facilities £419m • Successfully extended £169m bank facilities • Refinanced £40m of retail bonds £611m Banks • Average period to maturity of funding of 2.5 years £192m • Headroom supports business plans into 2024 • Blended cost of funding of 13.3%
Slide 20: Outlook
IPF plc 2022 full-year results Outlook Gerard Ryan, CEO Building a better world through financial inclusion
Slide 21: Outlook
OUTLOOK • Significant long-term demand for affordable credit • Good start to 2023 as we navigate challenging macroeconomic landscape • Focus on: - Transitioning Poland to the lower TCC cap - Expanding in Mexico; - Regaining scale in IPF Digital - Strict control of costs • More modest receivables gro
Slide 22: Questions
Source new image IPF plc 2022 full-year results Building a better world through financial inclusion Questions Building a better world through financial inclusion
Slide 23: Appendix
Source new image IPF plc 2022 full-year results Building a better world through financial inclusion Appendix Building a better world through financial inclusion
Slide 24: Group
Change at GROUP 2022 2021 Change Change CER £m £m £m % % Customer numbers (000s) 1,733 1,727 6 0.3 Customer lending 1,126.4 982.1 144.3 14.7 13.7 Closing net receivables 868.8 716.8 152.0 21.2 14.2 Revenue 645.5 548.7 96.8 17.6 15.1 Impairment (106.7) (56.2) (50.5) (89.9) (70.4) Revenue less impairm
Slide 25: European home credit
EUROPEAN HOME CREDIT Change at 2022 2021 Change Change CER £m £m £m % % Customer numbers (000s) 784 810 (26) (3.2) Customer lending 637.0 599.2 37.8 6.3 9.9 Closing net receivables 501.0 425.9 75.1 17.6 14.4 Revenue 317.5 284.7 32.8 11.5 14.8 Impairment (5.2) 1.6 (6.8) (425.0) (533.3) Revenue less i
Slide 26: Mexico home credit
MEXICO HOME CREDIT Change at 2022 2021 Change Change CER £m £m £m % % Customer numbers (000s) 696 654 42 6.4 Customer lending 257.4 194.2 63.2 32.5 16.8 Closing net receivables 158.5 117.6 40.9 34.8 14.2 Revenue 210.9 146.0 64.9 44.5 27.4 Impairment (75.5) (33.8) (41.7) (123.4) (91.6) Revenue less i
Slide 27: IPF Digital
IPF DIGITAL Change at 2022 2021 Change Change CER £m £m £m % % Customer numbers (000s) 253 263 (10) (3.8) Customer lending 232.0 188.7 43.3 22.9 21.5 Closing net receivables 209.3 173.3 36.0 20.8 13.9 Revenue 117.1 118.0 (0.9) (0.8) (1.3) Impairment (26.0) (24.0) (2.0) (8.3) (6.6) Revenue less impai
Slide 28: Strong financial profile
STRONG FINANCIAL PROFILE 2022 2021 Receivables (£m) 868.8 716.8 Equity (£m) 445.2 367.1 Equity to receivables 51.2% 51.2% Gearing 1.2 1.3 Interest cover 2.2 2.5 Pre-exceptional EPS (p) 20.8 18.8 Pre-exceptional ROE 11.5% 11.4% Pre-exceptional RORE 14.6% 15.1% Building a better world through financia
Slide 29: Balance sheet
BALANCE SHEET 2022 2021 Change at CER % Goodwill 24.2 22.9 - Fixed assets 64.5 56.7 8.4% Receivables 868.8 716.8 14.2% Cash 50.7 41.7 15.5% Borrowings (548.8) (471.6) (12.0%) Other net (liabilities) / assets (14.2) 0.6 (395.8%) Equity 445.2 367.1 10.4% At HY-22, borrowings is stated net of deferred
Slide 30: Key performance indicators
KEY PERFORMANCE INDICATORS 2019 2021 2022 New Previous New Previous New Previous Revenue yield 59.2% 90.1% 48.1% 81.0% 51.9% 83.3% Impairment to revenue/impairment rate 16.2% 27.4% 4.9% 10.2% 8.6% 16.5% Cost-income ratio 52.7% 43.6% 67.6% 55.7% 60.9% 48.9% Building a better world through financial i
Slide 31: Exchange rates
EXCHANGE RATES Closing rates Closing rates Average Closing rates Average February 2023 December 2022 2022 December 2021 2021 Polish zloty 5.4 5.3 5.5 5.4 5.3 Czech crown 26.8 27.2 28.5 29.5 29.7 Euro 1.1 1.1 1.2 1.2 1.2 Hungarian forint 429.4 450.8 452.3 438.7 415.3 Romanian leu 5.6 5.6 5.8 5.9 5.7
Slide 32: Contacts
CONTACTS Equity IR contact Rachel Moran Investor Relations Manager Telephone: +44 (0)7760 167637 Email: rachel.moran@ipfin.co.uk Debt funding IR contact Krzysztof Adamski Group Treasurer Telephone: +48 600400394 Email: krzysztof.adamski@ipfdigital.com Building a better world through financial inclus
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