Slide 1: 9M results 2020 – Earnings Call
9M results 2020 – Earnings Call 16 November 2020
Slide 2: Important notice
2 Important notice This presentation contains, or may be deemed to contain, forward-looking statements. All forward-looking statements included herein are based on information presently These statements relate to future events or future financial performance of Ferratum. available to Ferratum and, a
Slide 3: 9M 2020 Overview & Key takeaways
9M 2020 Overview & Key takeaways 15 Years of operation 20 Countries Consumer lending CapitalBox (SME) Mobile Bank & Primeloan FAST, EASY 87% of revenues 12% of revenues 1% of revenues & DIGITAL Key takeaways FINANCIAL • Re-activated lending growth in Q3 2020 SOLUTIONS. • Financial metrics remain str
Slide 4: Strengthened focus on core products
Strengthened focus on core products Average Average Revenue 9M Revenues by Active Products Loan Loan Comments Share Product (€,000) Markets Value Term Primeloan 2019 2 586 (incl. Mobile Bank) -3% y-o-y • Primelending live in 4 markets, speed of role €6,893 5.1 years 1.4% 4 (4) €3,000 – €20,000 / 202
Slide 5: Update on Ferratum's COVID-19 action plan
Update on Ferratum‘s COVID-19 action plan 1. Liquidity management 2. Control Risk Liquidity position remains strong driven by While risk appetite in H1 2020 was reduced at an early stage of the pandemic, the group increased lending during Q3 2020 a. continued successful management of term deposits i
Slide 6: Reactivating growth in 2020: continued increase in lending volume
Reactivating growth in 2020: Management aims at continued increase in lending volume Loan volume disbursed, EUR m 500 Net loans to customers, EUR m 70 386 400 348 354 365 366 335 346 306 321 60 300 200 50 100 40 0 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 30 20 • Increased lending volume
Slide 7: Investments in future growth: CapitalBox acquired Spotcap NL's SME lending activities
Investments in future growth: CapitalBox acquired Spotcap NL’s SME lending activities • About CapitalBox - Leading digital SME lender - Active in six European markets - Over the last 5 years, CapitalBox has developed a strong track record of growth • Spotcap’s SME lending business: in the Netherland
Slide 8: 9M 2020 Financial overview
9M 2020 Financial overview 8 8
Slide 9: Key financial metrics: Strict cost discipline and conservative underwriting
Key financial metrics: Strict cost discipline and conservative underwriting drives EBIT in Q3 2020 and in the first 9M 2020 ▪ Revenue reduction y-o-y -19% for the first nine EUR million Q1 2020 Q2 2020 Q3 2020 9M 2020 9M 2019 % change months of 2020 a. COVID-19 impact as of early March 2020 Revenue
Slide 10: Revenue Bridge: 9M 2019 vs 9M 2020
Revenue Bridge: 9M 2019 vs 9M 2020 Key drivers: EUR m EUR m • Suspension of lending in selected markets (not related to COVID-19) during early 2020 accounts for more than half of revenue delta • Active markets contribute less than half to revenue reduction (predominantly due to tighter risk manageme
Slide 11: Adjusted EBT: impact of macroeconomic impairment and higher FX volatility
11 Adjusted EBT: impact of macroeconomic impairment and higher FX volatility EUR m Key drivers: • COVID 19 impairment related to macro-economic outlook impacts profitability in Q1 • Hedging levels have been increased significantly, but impact on profitabilty is stronger than in 2019 • Adjustments fo
Slide 12: Balance sheet ratios continue to remain strong - solid equity ratio of 18.4%
Balance sheet ratios continue to remain strong - solid equity ratio of 18.4% 30 September 30 September 12 EUR ‘000 31 Dec 2019 % Change EUR ‘000 31 Dec 2019 % Change 2020 2020 Assets Equity and liabilities Non-current assets 60,395 60,512 -0.2% Equity 127,666 129,138 -1.1% Accounts receivable – cust
Slide 13: Cash position remains strong
13 Cash position remains strong • Total cash is 100% above the level of Q3 Cash and cash equivalents in Group 2019 600,0 100,0% 90,6% • Ferratum has been able to grow the cash 82,9% 86,2% 90,0% balance steadily since Q1 2019 500,0 75,6% 73,5% 80,0% 69,9% • Reduction in deposit base and cash during 6
Slide 14: Continued shift towards longer-term lending products
Continued shift towards longer-term lending products – dynamic in Prime Lending picking up in Q3 • Revenue share of Credit Limit product stable at 60% Mobile Bank and • SME revenue share at EUR ‘000 EUR ‘000 Microloan PlusLoan Credit Limit CapitalBox Primeloan Total 12% 9M 2020 9M 2019 9M 2020 9M 20
Slide 15: Cost reduction measures: Leaner organization successfully established
Cost reduction measures: Leaner organization successfully established Personnel expenses Headcount and personnel expenses 1000 12 000 000 • Decrease in headcount > 200 y-o-y 11 000 000 • Quarterly personnel expenses y-o-y 900 down by 33.5% to EUR 7.4 million (Q3 19: 10 000 000 EUR 11.1 million) 800
Slide 16: Overall payment behaviour improves in 9M 2020 despite COVID-19
Overall payment behaviour improves in 9M 2020 despite COVID-19 Payment behaviour and impairments Invoices paid within 7, 14 and 30 DPD • Payment behaviour remained strong throughout Q3 and is also stable as per mid November 2020 • Ferratum has adjusted its scoring and underwriting criteria for a det
Slide 17: Mid-term trend of improving asset quality continues
Mid-term trend of improving asset quality continues Impairment losses as per IFRS 9 going down relative to loan portfolios Impairment losses (total) / NAR 12,00% • Mid-term improving trend in impairment losses over net accounts receivable (NAR) 9,71% 10,00% continues 8,58% 8,25% 2,12% 7,90% 8,00% 7,
Slide 18: EBIT Development
EBIT Development 2018 2019 2020 EUR m 14 13,0 12,5 12,3 12,0 12 10,8 10,1 9,7 10 9,3 8,8 8 6,5 6 5,5* 4 2 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 -2 -4 -2,3 * Adjusted EBIT excluding COVID-19 related impairments 18 FE-Classification: General\Anyone
Slide 19: Funding structure and cost of debt capital
Funding structure and cost of debt capital Financing mix at year end 2019 Financing mix at end of Q3 2020 Ferratum Bank 6.25% + 3m Euribor 2020 EUR 100m Ferratum Capital Germany 5.5% + 3m Euribor 2022 EUR 100m EUR 80m Ferratum Capital Germany 5.5% + 3m Euribor 2023 EUR 80m EUR 30m Credit Line EUR 30
Slide 20: Summary and key takeaways
Summary and key takeaways • Successful execution of the 4-stage COVID-19 pandemic reaction measures: - Risk exposure well under control - substantial leaner organization established (in terms of headcount, digitization and total operating cost base) - financial metrics continued to strengthen • Lend
Slide 21: Thank you
Thank you 21