Propel Holdings, Inc. · TSX:PRL
Propel — Investor Presentation (June 2023)
28 slides from Propel's investor presentation, Jun 21, 2023
Slide 1: Investor Presentation
INVESTOR PRESENTATION TSX:PRL June 21, 2023
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 2023, the expansion of Fora Credit into other geographies in
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: Financial Inclusion for the Underserved Population
Financial Inclusion for the Underserved Population 32% 30% 25% 54% U.S. adults are Americans Canadians are Canadians say unable to afford a experience unserved or they’re living $400 emergency hardships due to underserved in paycheque to expense1 income volatility2 the credit market3 paycheque4 Inac
Slide 6: Propel Today
Propel Today 100% online At Scale Profitable Financials shown in US$ Financials shown in US$ $1.13B ~7M Q1 2023 Fiscal 2022 in originations* unique applications Revenue $65.6M $226.9M per year** 998,600 ~18,000 Adjusted $17.0M $40.8M facilitated loans unique applications EBITDA*** and lines of credi
Slide 7: Products
PRODUCTS Inclusive Transparent Evolving “This loan was painless and straight forward. The costumer service was like talking to a family member. There was no judgment on me but very understanding and helpful.” ~ Valene, Fora Credit customer 7
Slide 8: Products and Services
Products and Services Lending-as-a-Service Partnership Product/Service Fully amortizing installment loans Open-ended lines of Open-ended lines of Open-ended lines of Consumer Product credit credit credit Open-ended lines of credit State-licensed direct lender Credit services Lending-as-a-service org
Slide 9: Latest Developments
Latest Developments Currently offered in Alberta, British Columbia, Officially launched June 20, 2023 Ontario and Saskatchewan with plans to roll out into additional provinces throughout 2023 End-to-end solution for Pathward’s <36% APR lending product Personal Lines of Credit from $1,000 - $10,000 S
Slide 10: 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 11: Platform to Succeed
Platform to Succeed Convenient Seamless Mobile “The representative I worked with was great and extremely professional. They made the process easy and explained all the details well. I was impressed.” ~ Theresa, CreditFresh customer 11
Slide 12: Industry-Leading Proprietary Technology Designed for Consumer Needs
Industry-Leading Proprietary Technology Designed for Consumer Needs 69 person in-house tech team Major subsystems: proven 6-week Agile delivery cycle • Acquisition and underwriting engine (AI-powered) • Loan management system Customer self-service portal (mobile optimized) US$19.6M • invested to dat
Slide 13: 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 $1,000,000,000 Fund More 12% Alternative Credit Bureau Data Sub-10 se
Slide 14: World Class Operations Team
World Class Operations Team Relentless focus on service and performance “The application process was simple and quick. The customer service representative was professional, courteous, and very knowledgeable.” ~ Tawanna, MoneyKey customer Excellent 4.6 ratings from thousands of consumers 24 / 7 7 day
Slide 15: Financial Overview
FINANCIAL OVERVIEW Profitable Diversified Resilient “Excellent customer service and support. From start to finish they help you along the way!” ~ Shannon, CreditFresh Customer 15
Slide 16: Q1 2023 Financial Performance
Q1 2023 Financial Performance US$M Continued Focus on Profitable Growth Driving Strong Results Loans and Advances Receivable Revenue Adjusted EBITDA* $226.9 $40.8 $195.6 $195.8 $25.4 $129.6 $103.8 $20.0 $17.0 $73.5 $49.8 $65.6 $50.5 $9.7 2020 2021 2022 Q1 2023 2020 2021 2022 Q1 2022 Q1 2023 2020 202
Slide 17: Q1 2023 Financial Performance
Q1 2023 Financial Performance Revenue US$M § Record Loans and Advances Receivable and Ending Combined Loan and Advance Balances* $226.9 § Growth and expansion of 3 Bank Partners § Expansion of variable pricing and graduation capabilities § Origination growth into Canada and through key $129.6 market
Slide 18: Q1 2023 Financial Performance
Q1 2023 Financial Performance Provision for loan losses and other liabilities (“Provision”) § Q1 2023 Provision % Revenue same as Q1 2022: 58% § Indicative of effectiveness of credit risk management 53% 54% 53% and resilience of the underserved consumer amidst a 47% 47% shifting macro landscape 47%
Slide 19: Q1 2023 Financial Performance
Q1 2023 Financial Performance US$M Net Income Adjusted Net Income* § All Q1 2023 metrics represent growth over prior year $20.4 and record quarterly performance § Continued growth in revenue $15.1 $12.9 § Notable cost efficiencies $9.2 $7.3 $7.4 $8.3 § Operating leverage in the business $6.6 $5.6 $3
Slide 20: Solid Financial Position
Solid Financial Position US$M § Company well funded for existing business, the recent launch of Fora and Credit Capacity soon to be launched Pathward program and to support dividend (in US$M) § Approximately $140 million in undrawn credit capacity as of March 31, 2023 § Recently upsized new CreditFr
Slide 21: Growth Outlook: Operating and Financial Targets
Growth Outlook: Operating and Financial Targets Metric 2023 Target (US$) Ending Combined Loan and Advance 45% to 55% Balances* Year-Over-Year Growth Revenue $315 million to $345 million Adjusted EBITDA Margin* 23% to 28% Net Income Margin 8.5% to 12.5% Adjusted Net Income Margin* 11% to 15% *See "Di
Slide 22: Evolving into a Diversified Online Global Fintech Company
Evolving into a Diversified Online Global Fintech Company Adjacent products • Design, deliver and cross-sell Geographic expansion complementary • Expansion into products aligned new states and with Propel’s core jurisdictions purpose Serving lower risk markets Graduating • Extension of existing cons
Slide 23: Ready for Tomorrow
READY FOR TOMORROW Poised Focused Strategic “My experience was great. Talking to the customer service agent was very easy and she did a great job explaining the process. Then getting approved for the funds was very easy. I will spread the word if my friends or family need money in the future to go w
Slide 24: Appendix
Appendix 24
Slide 25: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three Months Ended Mar 31, Year Ended Dec 31, US$ 2023 2022 2022 2021 2020 Net Income 7,415,178 3,876,527 15,127,447 6,562,442 7,332,388 Interest on Debt 4,856,533 1,293,277 9,784,859 5,317,923 4,052,783 Interest on lease liabilities 85,467 102,420 379,480 440,043 468
Slide 26: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation US$ Three Months Ended Mar 31, Year Ended Dec 31, 2023 2022 2022 2021 2020 Net Income 7,415,178 3,876,527 15,127,447 6,562,442 7,332,388 Transaction Costs and Financing Costs net of - - - 1,212,643 19,181 taxes 1 Provision for credit losses on current status 445,635 1
Slide 27: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation US$ As at Mar 31, As at December 31, 2023 2022 2022 2021 2020 Ending Combined Loan and Advance balances 1 248,051,240 158,151,577 247,488,344 134,843,170 62,643,735 Less: Loan and Advance balances owned by third party lenders pursuant to CSO (2,670,846) (3,752,500) (2
Slide 28: Non-IFRS Measure Reconciliation
Non-IFRS Measure Reconciliation Three Months Ended Mar 31, Year Ended December 31, US$ 2023 2022 2022 2021 2020 Charge-offs (36,648,172) (21,781,825) (109,981,529) (46,898,488) (26,059,774) Recoveries 4,441,146 2,818,823 16,675,403 6,909,063 3,874,018 Net charge-offs 1 (32,207,026) (18,963,002) (93,