Delfin Group — Earnings Release 2021

Nov 5, 2021

FINANCIAL REPORT

UNAUDITED RESULTS FOR 9 MONTHS ENDING 30 SEPTEMBER 2021

Second largest non-bank consumer lender in Latvia*

DELFINGROUP AT A GLANCE

Largest IPO in Latvia in terms of number of investors

Latvian Corporate Governance Award 2021*

BUSINESS SEGMENTS

• Consumer loans
• Pawn loans
• POS loans
• Retail of pre-owned goods

90+ branches

400,000+ registered customers

last 10 years profitable operations

BRANDS:

KEY FINANCIALS (2021 9M)

37.1 m€ (+7% Y-o-Y) Value of issued loans

38.2 m€

(+12% Y-o-Y)

Net loan portfolio

3.48 m€ (-5% Y-o-Y) **

Profit before tax

7.0 m€

(+1% Y-o-Y)

EBITDA

* Forbes Latvia magazine No. 26 ( November 2021)

** Decrease in PBT due to reversal of loan loss provisions in Q3 2020 created at the beginning of Covid-19 pandemic

SELECTED FINANCIALS

EBITDA

Total revenue, quarterly cumulative

Profit before tax

* EBITDA and PBT for Q3 2020 is higher due to a reversal of provisions for doubtful debts created at the beginning of the Covid-19 pandemic

1 st and 2nd wave of COVID-19 restrictions in Latvia

CONSUMER LOANS

Consumer net loan portfolio

Weighted average term of loans issued Non-performing loan ratio

Average loan*

* Average consumer loan balance for one client at the end of period.

1 st and 2nd wave of COVID-19 restrictions in Latvia

PAWN LOANS

^{65 67 67 62 70 68 65 69 73} Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Average loan amount € +5 +8% +3 +4%

2021

2019

2020

Redemption rate*

* Items redeemed or extended within 2 months since issuance.

1 st and 2nd wave of COVID-19 restrictions in Latvia

RETAIL OF PRE-OWNED GOODS*

Number of items sold

Sales split by product category (2021 9M)

* Excluding wholesale of precious metals (scrap)

Consolidated income statement

		2021	Change	2020	2021	Change
INCOME STATEMENT, EUR'000	Q2	Q3	%	9M	9M	%
Total revenue	5,918	6,463	9%	17,003	18,399	8%
Cost of sales	-1,015	-849	-16%	-3,169	-2,612	-18%
Credit loss expense**	-570	-956	68%	-1,467	-2,240	53%
Interest expenses and similar expenses	-706	-885	25%	-2,517	-2,746	9%
Gross profit	3,627	3,773	4%	9,850	10,801	10%
Selling expenses	-1,443	-1,524	6%	-3,744	-4,292	15%
Administrative expenses	-1,070	-1,051	-2%	-2,496	-3,085	24%
Other operating income	11	29	164%	45	56	24%
Profit before tax	1,125	1,227	9%	3,655	3,480	-5%*
Income tax expense	-299	-201	-33%	-495	-824	66%
Net profit	826	1,026	24%	3,160	2,656	-16%
EBITDA	2,095	2,367	13%	6,924	7,005	1%

* PBT for Q3 2020 is higher due to a reversal of provisions for doubtful debts created at the beginning of the Covid-19 pandemic

** For the purpose of comparison, other operating expenses are reclassified to credit loss expense as major part of other operating expenses are losses from cession of non-performing loans (debt sales).

*** Data reflected according to restated comparatives in newest FS's.

Consolidated balance sheet

BALANCE SHEET, EUR'000	2020.12.31	2021.09.30	Change
Fixed and intangible assets	836	789	-6%
Loans to related paries	474	-	-100%
Net loan portfolio	34,674	38,183	10%
Inventory and scrap	1,534	1,797	17%
Other assets	655	746	14%
Cash	4,592	2,541	-45%
Right -of -use assets	3,194	3,013	-6%
TOTAL ASSETS	45,959	47,069	2%
EQUITY	9,251	8,696	-6%
Share capital and reserves	4,000	4,000	0%
Retained earnings	1,354	2,040	51%
Profit/loss for the current year	3,897	2,656	-32%
LIABILITIES	36,708	38,373	5%
Interest -bearing debt	31,151	33,290	7%
Trade payables and other liabilities	2,121	1,751	-17%
Lease liabilities for right -of -use assets	3,436	3,332	-3%
TOTAL EQUITY AND LIABILITIES	45,959	47,068	2%

FINANCIAL RATIOS

**Annualized

restrictions in Latvia

ROE**

Interest coverage ratio*

Appendix

Bonds 18.4

DIVERSIFIED AND SUSTAINABLE CAPITAL STRUCTURE

Active MINTOS investor map, Q3 2021

DelfinGroup has more than 70,000 investors in Mintos from 79 countries

Bond financing track record

Consolidated income statement

	2019*			2020				2021			2020	2021
Income Statement, EUR'000	Q1	Q2	Q3	Q4	Q1*	Q2*	Q3*	Q4	Q1	Q2	Q3	9M	9M
Total revenue	4,936	5,429	5,951	5,861	6,020	5,195	5,788	6,660	6,018	5,918	6,463	17,003	18,399
Cost of sales	-756	-856	-1009	-982	-1215	-961	-993	-1,055	-748	-1,015	-849	-3,169	-2,612
Credit loss expense**	-408	-643	-695	-893	-725	-439	-303	-937	-714	-570	-956	-1,467	-2,240
Interest expenses and similar expenses	-536	-664	-739	-914	-823	-887	-807	-972	-1,155	-706	-885	-2,517	-2,746
Gross profit	3,236	3,266	3,508	3,072	3,257	2,908	3,685	3,696	3,401	3,627	3,773	9,850	10,801
Selling expenses	-1,185	-1,420	-1,325	-1,496	-1,342	-1,155	-1247	-1,683	-1,325	-1,443	-1,524	-3,744	-4,292
Administrative expenses	-707	-863	-876	-1,042	-855	-776	-865	-1,044	-964	-1,070	-1,051	-2,496	-3,085
Other operating income	6	52	16	21	4	25	16	28	16	11	29	45	56
Profit before tax	1,350	1,035	1,323	555	1,064	1,002	1,589	997	1,128	1,125	1,227	3,655	3,480
Income tax expense	-338	-2	-3	-7	-26	-7	-462	-259	-324	-299	-201	-495	-824
Net profit	1,012	1,033	1,320	548	1,038	995	1,127	738	804	826	1,026	3,160	2,656
EBITDA	1,915	1,784	2,112	2,376	2,110	2,156	2,658	2,350	2,543	2,095	2,367	6,924	7,005

* Data reflected according to restated comparatives in newest FS's.

** For the purpose of comparison, other operating expenses are reclassified to credit loss expense as major part of other operating expenses are losses from cession of non-performing loans (debt sales).

Consolidated balance sheet

BALANCE SHEET, EUR'000	2019				2020				2021
	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
Fixed and intangible assets	652	621	775	691	748	860	927	836	864	818	789
Loans to related paries	1,295	1,389	1,397	1,308	1,376	1,381	376	474	445	-	-
Net loan portfolio	20,761	26,609	29,474	31,547	32,493	32,256	34,040	34,674	32,220	33,265	38,183
Inventory and scrap	1,111	1,173	1,231	1,155	1,224	1,186	1,545	1,534	1,693	1,533	1,797
Other assets	339	256	231	384	503	536	365	655	495	331	746
Cash	2,686	469	1,296	1,136	2,037	1,958	2,434	4,592	1,907	594	2,541
Right-of-use assets*				2,049	1,950	3,056	2,928	3,194	3,281	3,145	3,013
TOTAL ASSETS	26,844	30,517	34,404	38,270	40,331	41,233	42,615	45,959	40,905	39,686	47,069
EQUITY	5,466	6,499	7,819	8,367	9,405	10,401	9,513	9,251	8,639	8,108	8,696
Share capital and reserves	1,500	1,500	1,500	1,500	1,500	1,500	4,000	4,000	4,000	4,000	4,000
Retained earnings	2,954	2,954	2,954	2,954	6,867	6,867	2,354	1,354	3,835	2,478	2,040
Profit/loss for the current year	1,012	2,045	3,365	3,913	1,038	2,034	3,159	3,897	804	1,630	2,656
LIABILITIES	21,378	24,018	26,585	29,903	30,926	30,832	33,102	36,708	32,266	31,578	38,373
Interest-bearing debt	20,023	22,832	25,311	26,438	27,316	25,586	27,575	31,151	26,894	26,360	33,290
Trade payables and other liabilities	1,355	1,186	1,274	1,337	1,596	2,047	2,418	2,121	1,798	1,765	1,751
Lease liabilities for right-of-use assets*				2,128	2,014	3,199	3,109	3,436	3,574	3,453	3,332
TOTAL EQUITY AND LIABILITIES	26,844	30,517	34,404	38,270	40,331	41,233	42,615	45,959	40,905	39,686	47,069

* Adoption of IFRS16.

Environmentally responsible workplace

DelfinGroup has received quality and energy management certification under ISO 9001:2015 and ISO 50001:2015s standards

ENVIRONMENTAL SUSTAINABILITY

Electricity and petrol usage

MWh

* Energy intensity is calculated based on quarterly electricity and petrol consumption per employee

Environmentally responsible workplace

ENVIRONMENTAL SUSTAINABILITY (CONTINUED)

Greenhouse gas emissions and emission intensity

Greenhouse gas emissions*, t CO2 Greenhouse gas emission intensity*, kg of CO2 per 1 EUR of turnover

* Greenhouse gas emissions as a result of consumed electricity and petrol

DelfinGroup promotes efficient use of resources by returning preowned goods to secondary market

ENVIRONMENTAL SUSTAINABILITY (CONTINUED)

Pawn shop as part of circular economy

* Goods properly recycled or used as spare parts

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Employees

DelfinGroup is committed to be inclusive and supportive workplace. Company's gender pay gap in Q3 2021 is at 13%.

According to the Central Statistical Bureau of Latvia the pay gap in financial sector was 35%* in 2020

SOCIAL RESPONSIBILITY

Dynamics of the number of employees and gender diversity

Gender pay gap Age diversity 16.5% 16.3% 15.4% 15.8% 15.9% 8.9% 11.3% 13.1% 18.6% 16.1% 15.8% 14.8% 15.3% 14.9% 8.3% 10.6% 12.7% Q2 Q3 Q4 Q1 Q2 Q3

2021

with management w/o management

* Source: Gender equality: Employment and Earnings| Official statistics portal

Q4 Q1

2020

18.8%

Q3 2019

Employees

Stable average employee length of service indicates satisfaction among employees

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SOCIAL RESPONSIBILITY (CONTINUED)

Employee turnover and average employee length of service

Percentage of employees released during probationary period

-2%

3%

8%

13%

18%

Definitions for Alternative Performance Measures*

The goalof alternative performancemeasuresisto provide investors with performancemeasuresthat are widely used whenmaking investment decisions and comparing the performanceof different companies.

* Asstipulated by FCMC Regulations on Alternative PerformanceMeasures

EBITDA

Earnings before interest, taxes, depreciation and amortization = (Profit before tax) + (Interest expenses and similar expenses) + (Rights of used assets depreciation) + (Depreciation of fixed assets) + (Amortization). Used as a measure of corporate performance as it shows earnings before the influence of accounting and financial deductions.

EBITDAMargin

Operating profitability as a percentage of its total revenue, calculatedasEBITDA/(Interest income+Grossprofitfromsaleof foreclosed items). Used as a profitability measure that is factoring out the effects of decisions related to financing andaccounting.

InterestCoverageRatio

Profitability and debt ratio, calculated as ((Profit before corporate income tax) + (Interest expenses and similar expenses)/(Interest expenses and similar expenses). Usedtodeterminehow easily acompany canpay interest onits outstanding debt.

Cost-to-incomeRatio

((Sales expenses) + (Administrative expenses) + (Other expenses(excluding Lossfrom cession (debt sales) of non-performing loans)) ) / ((Net sales) – (Cost of sales) + (Interest income and similarincome) + (Other operating income) – (Interest expenses andsimilar expenses))

Return on Equity (ROE)

Net profitforthe period/monthsin the period*12 /( ((Equity as atstart of the period) + (Equity asatperiodend))/ 2)

Total revenue

Net sales + Interest income and similar income. Represents income generated by Company's businesssegments.

Interest-BearingDebt

Liabilitiesthatrequirethepaymentofinterest,including bonds, otherloans, leasing liabilities etc.Interest-Bearing Debt hasa priority overotherdebts.

Cost of interest-bearing liabilities

Weighted average nominal interest rate calculated by amount of interest bearing liabilities as at period end

Equity ratio

Equity/Totalassets

Non-performing loanratio

90+ days overdue portfolio share in total loan portfolio

DISCLAIMER

This presentation is ofselective nature and is made to provide an overview ofthe Company's(AS DelfinGroup and itssubsidiaries) business.

Unlessstated otherwise,this presentationshows informationfromconsolidated perspective.

Facts and information used in this presentation might be subject to revision in the future. Any forwardlooking informationmay be subject to change as well.

This presentation is not a legally binding document, and the Company has no liability for any direct or indirectloss from the use of this presentation.

This presentation does notintend to contain all the informationthatinvestors may require in evaluating the Company. Investorsshould read publicly available information regarding the Company to make an investment decision.

AS DelfinGroup Skanstesstreet 50A Riga, Latvia, LV -1013

aldis.umblejs@delfingroup.lv (+371) 66 15 50 06 www.delfingroup.lv