Delfin Group

Earnings Release • Feb 25, 2022

FINANCIAL REPORT

UNAUDITED RESULTS FOR 12 MONTHS ENDING 31 DECEMBER 2021

Largest financial services branch network in Latvia

DELFINGROUP AT A GLANCE

Latvian Corporate Governance Award 2021*

BUSINESS SEGMENTS

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

90+ branches

400,000+ registered customers

5,927

IPO

290+ employees

last 10 years profitable operations

BRANDS:

KEY FINANCIALS (2021 12M)

52.5 m€ (+9% Y-o-Y) Value of issued loans

43.0 m€

(+24% Y-o-Y)

portfolio

Total net loan

5.2 m€ (+12% Y-o-Y)

Profit before tax

10.2 m€ (+8% Y-o-Y)

EBITDA

* https://www.bicg.eu/corporate-governace-awards-held-in-latvia/

Q4 HIGLIGHTS

IPO DelfinGroup closed IPO on Nasdaq Riga. 5,927 investors participated, raising EUR 8.09 million gross proceeds. Shares listed on Baltic Main list.

TEAM Strengthening of the management team with Sanita Zitmane, an experienced professional in developing and managing fintech products.

FUNDING Redemption of bonds with 14% and 12% annual coupon rates. Refinanced by new bond emission with 8% annual coupon rate.

SOCIAL

INITIATIVES DelfinGroup supports Children's Hospital and seniors at social care institutions.

Q4 HIGLIGHTS

ACCESSIBILITY Opening of new Banknote branches in Riga (Zolitude) and Daugavpils. Banknote branch network reaching 93 entities in Latvia.

NEW PRODUCTS VIZIA credit line with limit up to EUR 3,000.

PRODUCT IMRPOVEMENTS Banknote and VIZIA consumer loan limit increase from EUR 5,000 to 7,000 and the repayment term extended up to seven years.

BANKNOTE APP Growing volumes of recently launched product. 39% increase of loan issuance via app quarter on quarter.

SELECTED FINANCIALS

Total loans issued

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, 2nd and 3rd wave of COVID-19 restrictions in Latvia

CONSUMER LOANS

Average loan*

Weighted average term of loans issued Non-performing loan ratio

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

PAWN LOANS

Average loan amount

Redemption rate*

* Items redeemed or extended within 2 months since issuance.

1 st, 2nd and 3rd wave of COVID-19 restrictions in Latvia

RETAIL OF PRE-OWNED GOODS*

Number of items sold

Sales split by product category (2021 12M)

* Excluding wholesale of precious metals (scrap)

CONSOLIDATED INCOME STATEMENT

		2021	Change	2020	2021	Change
INCOME STATEMENT, EUR'000	Q3	Q4	%	12M**	12M	%
Total revenue	6,463	7,089	10%	23,664	25,489	8%
Cost of sales	-849	-1,057	24%	-4,224	-3,668	-13%
Credit loss expense*	-956	-237	-75%	-2,404	-2,477	3%
Interest expenses and similar expenses	-885	-1,109	25%	-3,547	-3,855	9%
Gross profit	3,773	4,687	24%	13,487	15,488	15%
Selling expenses	-1,524	-1,866	22%	-5,446	-6,158	13%
Administrative expenses	-1,051	-1,127	7%	-3,261	-4,213	29%
Other operating income	29	29	0%	72	85	16%
Profit before tax	1,227	1,723	40%	4,854	5,203	7%
Income tax expense	-201	-155	-23%	-755	-979	30%
Net profit	1,026	1,568	53%	4,100	4,224	3%
EBITDA	2,367	3,191	35%	9,466	10,196	8%

* 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	2021.12.31	Change
Fixed and intangible assets	1,038	1,201	16%
Loans to related parties	474	-	-100%
Net loan portfolio	34,674	42,962	24%
Inventory and scrap	1,534	1,949	27%
Other assets	655	520	-21%
Cash	4,592	2,460	-46%
Right-of-use assets	3,194	2,973	-7%
TOTAL ASSETS	46,161	52,065	13%
EQUITY	9,454	17,377	84%
Share capital and reserves	4,000	4,532	13%
Share premium		6,891	100%
Retained earnings	1,354	1,731	28%
Profit/loss for the current year	4,100	4,224	3%
LIABILITIES	36,708	34,687	-6%
Interest-bearing debt	31,151	29,412	-6%
Trade payables and other liabilities	2,121	1,970	-7%
Lease liabilities for right-of-use assets	3,436	3,305	-4%
TOTAL EQUITY AND LIABILITIES	46,161	52,065	13%

FINANCIAL RATIOS

Interest coverage ratio*

2021

42.2%

Q3 Q4 Q1

35.6% 37.6%

45.2% 46.7%

Q2 Q3 Q4

1 st, 2nd and 3rd wave of COVID-19 restrictions in Latvia

Capital structure, Q4 2021

DIVERSIFIED AND SUSTAINABLE CAPITAL STRUCTURE

Active MINTOS investor map, Q4 2021

DelfinGroup has more than 64,000 investors in Mintosfrom 107 countries

Regular cash distribution to shareholders

Dividend payments 5 times a year:

• 4 quarterly
• 1 annual

DIVIDENDS

EUR 512,111 Dividends paid in Q4

EUR 0.0113

Per share

Dividend policy

Quarterly dividends

Up to 50% from previous Q profit

Annual dividends In amount to ensure optimal capital structure

*Proposed dividends by the Management Board. Decision on approval to be made at Extraordinary Shareholders' Meeting

SHARE PERFORMANCE

Share price, EUR

105%

Share dynamics compared to indexes

31.12.2021	DelfinGroup	Financial industry**
Capitalization m EUR	63.5	-
EPS EUR*	0.103	-
P/E	13.6	21.4
P/BV	3.7	3.2

*Calculations based on weighted average of total outstanding shares that increased in 2021 due to stock split and listing of new public shares.

**Average ratio for financial services companies listed on Nasdaq Baltic Main list at 31.12.2021.

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Appendix

Consolidated income statement

	2019*				2020*				2021				2020	2021
Income Statement, EUR'000	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	12M*	12M
Total revenue	4,936	5,429	5,951	5,861	6,020	5,195	5,788	6,659	6,018	5,918	6,463	7,090	23 664	25,489
Cost of sales	-756	-856	-1009	-982	-1215	-961	-993	-1,055	-748	-1,015	-849		-1,057 -4,224	-3,669
Credit loss expense**	-408	-643	-695	-893	-725	-439	-303	-937	-714	-570	-956	-237	-2,404	-2,477
Interest expenses and similar expenses	-536	-664	-739	-914	-823	-887	-808		-1,029 -1,155	-706	-885		-1,109 -3 547	-3,855
Gross profit	3,236	3,266	3,508	3,072	3,257	2,908	3,684	3,638	3,401	3,627	3,773	4,687	13,487	15,488
Selling expenses	-1,185	-1,420	-1,325	-1,496	-1,342	-1,155	-1247	-1,703	-1,325	-1,443	-1,524	-1,866	-5,446	-6,158
Administrative expenses	-707	-863	-876	-1,042	-855	-776	-865	-765	-964	-1,070	-1,051	-1,127	-3,261	-4,213
Other operating income	6	52	16	21	4	25	16	28	16	11	29	29	72	85
Profit before tax	1,350	1,035	1,323	555	1,064	1,002	1,588	1,198	1,128	1,125	1,227	1,723	4,854	5,203
Income tax expense	-338	-2	-3	-7	-26	-7	-462	-259	-324	-299	-201	-155	-755	-979
Net profit	1,012	1,033	1,320	548	1,038	995	1,126	939	804	826	1,026	1,568	4,100	4,224
EBITDA	1,915	1,784	2,112	2,376	2,110	2,155	2,659	2,542	2,543	2,095	2,367	3,191	9,466	10,196

* 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

			2019				2020		2021
BALANCE SHEET, EUR'000	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Fixed and intangible assets	652	621	775	691	748	860	927	1,038	864	818	790	1,201
Loans to related parties	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	38,182	42,962
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	1,949
Other assets	339	256	231	384	503	536	365	655	495	331	746	520
Cash	2,686	469	1,296	1,136	2,037	1,958	2,434	4,592	1,907	594	2,541	2,460
Right-of-use assets*	-	-	-	2,049	1,950	3,056	2,928	3,194	3,281	3,145	3,013	2,973
TOTAL ASSETS	26,844	30,517	34,404	38,270	40,331	41,233	42,615	46,161	40,905	39,686	47,069	52,065
EQUITY	5,466	6,499	7,819	8,367	9,405	10,401	9,513	9,454	8,639	8,108	8,696	17,377
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	4,532
Share premium	-	-	-	-	-	-	-	-	-	-	-	6,891
Retained earnings	2,954	2,954	2,954	2,954	6,867	6,867	2,354	1,354	3,835	2,478	2,040	1,731
Profit/loss for the current year	1,012	2,045	3,365	3,913	1,038	2,034	3,159	4,100	804	1,630	2,656	4,224
LIABILITIES	21,378	24,018	26,585	29,903	30,926	30,832	33,102	36,708	32,266	31,578	38,373	34,687
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	29,412
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	1,970
Lease liabilities for right-of-use assets*	-	-	-	2,128	2,014	3,199	3,109	3,436	3,574	3,453	3,332	3,305
TOTAL EQUITY AND LIABILITIES	26,844	30,517	34,404	38,270	40,331	41,233	42,615	46,161	40,905	39,686	47,069	52,065

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

* 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

Employees

DelfinGroup is committed to be inclusive and supportive workplace. Company's gender pay gap in Q4 2021 is at 16%.

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

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

Employees

Stable average employee length of service indicates satisfaction among employees

0.0

1.0

2.0

3.0

4.0

5.0

SOCIAL RESPONSIBILITY (CONTINUED)

Employee turnover and average employee length of service

Percentage of employees released during probationary period

-2%

3%

8%

13%

18%

25 Altogether 6 bond issues

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

IR@delfingroup.lv (+371) 26 18 99 88 www.delfingroup.lv