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Delfin Group Investor Presentation 2020
2238_rns_2020-11-02_d7f915a2-648f-4f73-b197-b3d06f13b584.pdf
Investor Presentation
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INVESTOR PRESENTATION
2020 Q3 RESULTS
November, 2020
This presentation is of selective nature and is made to provide an overview of the Company's (SIA DelfinGroup and its subsidiaries) business.
Unless stated otherwise, this presentation shows information from consolidated
- perspective.
Facts and information used in this presentation might be subject to revision in the future. Any forward-looking information may be subject to change as well.
This presentation is not a legally binding document and the Company has no liability for any direct or indirect loss from the use of this presentation.
This presentation does not intend to contain all the information that investors may require in evaluating the Company. Investors should read publicly available information regarding the Company as well as the full prospectus describing a particular bonds issue.
DISCLAIMER
*Based on reported annual revenue of licensed non-bank consumer lenders in 2019
HIGHLIGHTS
In 2020Q3, Group has increased issuance level by 71.8% compared to 2020Q2, reaching highest issuance level since the foundation of the company.
26.0% improvement in y-o-y Q2 EBITDA has been achieved.
* Loan portfolio data based on DelfinGroup net consumer loan portfolio excl. accrued interest.
** Based on consumer loan portfolio as at the end of 2019.
MARKET OVERVIEW
DelfinGroup* grows faster than the industry, having ~7%** market share.
CONSUMER LOANS
CONSUMER LOAN PORTFOLIO, DELFINGROUP VS. INDUSTRY*
AMOUNT OF CONSUMER LOANS ISSUED, DELFINGROUP VS. INDUSTRY*
*Source: Consumer Rights Protection Centre.
mEUR
mEUR
CONSUMER LOANS
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30,0
* Loan portfolio data based on DelfinGroup net consumer loan portfolio incl. accrued interest.
In 2020Q3, portfolio have increased
CONSUMER LOANS
AMOUNT OF PAWN LOANS ISSUED, DELFINGROUP VS INDUSTRY*
*Source: Consumer Rights Protection Centre.
0
10
20
30
40
50
60
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
The market share of issued loans is growing every year.
PAWN LOAN PORTFOLIO, DELFINGROUP VS INDUSTRY*
MARKET OVERVIEW
In 2019, 42% of all pawn loans issued in Latvia were issued by DelfinGroup.
PAWN LOANS
PAWN LOANS
Group has increased issuance level by 40.5% compared to 2020Q2 for secured lending, showing positive recovery after the state of emergency was lifted on 10 June 2020.
Portfolio have increased by 8.7% compared to 2020Q2.
PAWN LOANS
* Items begin redeemed or extended within 3 months since issuance, by value of loans issued excl. item purchasing.
Stable customer base and stable performance of pawnshop operations.
DETAILED COVID-19 IMPACT DINAMICS
As a response to COVID-19 during March to May Group applied cautious issuance approach. In 2020Q3 the amount of issued loans was gradually increased and in total reached €14.6 million, by 16% more than in 2019Q3 .
CONSUMER AND PAWN LOANS ISSUED
DETAILED COVID-19 IMPACT DINAMICS
* Loan portfolio data based on DelfinGroup net consumer loan portfolio incl. accrued interest. ** Includes car title loan and mortgage loan legacy portfolios.
In 2020Q3, portfolio have increased by 20.9% compared to 2020Q2.
0,0
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LOANS OUTSTANDING
NON-PERFORMING LOANS RATIO - CONSUMER LOANS
Due to Group's conservative credit policy and stable and reliable customer base non-performing loan ratio have remained relatively low, ensuring stable portfolio quality.
KEY FINANCIALS
In 2020Q3 cash outflow from consumer lending and pawn shop activities exceeds cash inflow from consumer lending and pawn shop activities due to increased issuance level in 2020Q3.
FINANCIAL RATIOS
Sustainable financial performance.
| INCOME STATEMENT, EUR'000 | 2019 Q3 | 2020 Q3 | %, Y - O - Y |
|---|---|---|---|
| Interest and similar income | 12 082 | 12 030 | 0 % |
| Gross profit from sale of goods | 1 324 | 1 516 | 15% |
| Cession result | (1 039) | (561 ) |
(46%) |
| GROSS PROFIT | 12 367 | 12 985 | 5 % |
| Selling expense | (4 076) | (3 477 ) |
(15%) |
| Administrative expense | (2 446) | (2 495 ) |
2 % |
| Net other income / (expense) | (34) | (103 ) |
(203%) |
| EBITDA | 5 811 | 6 910 | 1 9 % |
| Depreciation | (164) | (740 ) |
351 % |
| Interest and similar expense | (1 939) | (2 515 ) |
30 % |
| Taxes | (343) | (495 ) |
44 % |
| NET PROFIT | 3 365 | 3 153 | ( 6%) |
KEY FINANCIALS: PROFITABILITY
Depreciation increased after incorporation of IFRS 16 on Right -of -use assets since 2019Q4.
Double -digit growth of comparable EBITDA.
| BALANCE SHEET, EUR'000 | 2020 Q2 | 2020 Q3 | %, Q - O - Q |
|---|---|---|---|
| Fixed and intangible assets | 3 915 | 3 855 | (2 % ) |
| Loans to related parties | 1 382 | 376 | (73 % ) |
| Net loan portfolio | 32 256 | 3 4 041 |
6% |
| Inventory and scrap | 1 186 | 1 545 | 3 0 % |
| Other assets | 536 | 365 | (32 % ) |
| Cash | 1 958 | 2 434 | 24% |
| TOTAL ASSETS | 41 233 | 42 616 | 3 % |
| Share capital and reserves | 1 500 | 4 000 |
167% |
| Retained earnings | 6 868 | 2 354 |
(66%) |
| Profit/loss for the current year | 2 034 | 3 159 | 55 % |
| EQUITY | 10 402 | 9 513 | (9 % ) |
| Interest -bearing debt |
25 587 | 27 575 | 8 % |
| Trade payables and other liabilities | 5 244 | 5 527 | 5% |
| LIABILITIES | 30 831 | 33 102 | 7 % |
| TOTAL EQUITY AND LIABILITIES | 41 233 | 42 616 | 3 % |
KEY FINANCIALS: BALANCE
Strong cash buffer .
Shareholders have increased DelfinGroup share capital to €4 million on July 28, 2020 by diverting retained earnings to strengthen the company's balance sheet.
During 2020Q3 dividends in amount of € 2 million was paid out. In addition, shareholders have reduced its liabilities by 73% compared to 2020Q2.
* Part of unified securitization structure with ZAB Eversheds Sutherland Bitāns acting as the collateral agent. Collateral with total value 40.5m EUR
registered on December 2019.
** Weighted average interest rate for investments made on Mintos platform in DelfinGroup loans as at 30.09.2020. Weighted average interest rate have increased due to decrease of available investments on Mintos platform.
FINANCING STRUCTURE
Diversified financing structure with established investor demand.
In September 2020, DelfinGroup decreased the nominal value of the bonds issue ISIN LV0000801322 for EUR 437 500 thus continuing quarterly repayments of the principal.
In September 2020 subscription for new unsecured bond issue ISIN LV0000802429 totaling EUR 3 500 000 was successfully completed.
Bond issue proceeds partly used to increase issuance level.
| INTEREST-BEARING DEBT | 2020 Q2, EUR'000 | 2020 Q3, EUR'000 | INTEREST RATE, % | MATURITY |
|---|---|---|---|---|
| Secured bonds II* | 875 | 438 | 15% | 12/2020 |
| Secured bonds III* | 5 000 | 5 000 | 14% | 10/2021 |
| Secured bonds IV* | 4 500 | 4 566 | 14% | 11/2022 |
| Unsecured bonds | - | 3 500 | 12% | 11/2022 |
| Peer-to-peer lending platform Mintos* |
14 687 | 13 544 | 12.1% (effective rate)** |
According to issued loans |
| Leases | 83 | 73 | EURIBOR+ 3.5% | Up to 3 years |
| Private loans | 480 | 480 | 14.0% | Up to 3 years |
| Accrued interest and bonds commissions |
(41) | (26) | ||
| TOTAL | 25 584 | 27 574 |
ENVIRONMENTAL SUSTAINABILITY
ENVIRONMENTALLY RESPONSIBLE WORKPLACE
0,0
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40,0
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100,0
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180,0
200,0
ENERGY INTENSITY*
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1
* Energy intensity is calculated based on quarterly electricity and petrol usage to employee count
DelfinGroup have received quality and energy management certification under ISO 9001:2015 and ISO 50001:2015 standards
In 2020Q3 Greenhouse gas emission intensity per 1 EUR of turnover have decreased by 8.7% compared to 2020Q2.
ENVIRONMENTAL SUSTAINABILITY
ENVIRONMENTALLY RESPONSIBLE WORKPLACE
0
0,01
0,02
0,03
0,04
0,05
180
GREENHOUSE GAS EMISSION*, t CO2 GREENHOUSE GAS EMISSION INTENSITY*, kg of CO2 per 1 EUR of turnover
200 GREENHOUSE GAS EMISSION AND GREENHOUSE GAS EMISSION INTENSITY
* Greenhouse gas emission as a result of consumed electricity and petrol
DelfinGroup promotes efficient use of resources by returning workable goods to secondary market.
ENVIRONMENTAL SUSTAINABILITY
PAWN SHOP AS PART OF CIRCULAR ECONOMY
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
GOODS REPAIRED AND RETURNED TO SECOND MARKET
* Goods properly recycled or used as spare parts for repair
SOCIAL RESPONSIBILITY
At the end of 2020Q3, the percentage of female employees is 44% leading to improved work-place gender equality.
DelfinGroup is committed to be inclusive and supportive workplace. Group's gender pay gap in 2020Q3 is at 16%, the same as EU average*
EMPLOYEES
DYNAMICS OF THE NUMBER OF EMPLOYEES AND GENDER DIVERSITY
100
120
140
160
180
200
220
240
260
280
300
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
* https://ec.europa.eu/info/sites/info/files/aid_development_cooperation_fundamental_rights/annual_report_ge_2019_en.pdf
TOTAL GENDER PAY GAP
SOCIAL RESPONSIBILITY
Increasing average employment time in Group indicates satisfaction among employees.
EMPLOYEES
EMPLOYEES TURNOVER AND AVERAGE EMPLOYMENT TIME IN COMPANY
PERCENTAGE OF EMPLYEES RELEASED DURING PROBATION PERIOD
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0,0
1,0
2,0
3,0
4,0
5,0
6,0
DEFINITIONS FOR ALTERNATIVE PERFORMANCE MEASURES*
Earnings before interest, taxes, depreciation and amortization calculated as Net Income +
Interest + Taxes + Depreciation + Amortization. Used as a measure of corporate performance as it shows earnings before the influence of accounting and financial
Operating profitability as a percentage of its total revenue, calculated as EBITDA / (Interest income + Gross profit from sale of foreclosed items). Used as a profitability measure that is factoring out the effects of decisions related to financing and accounting.
How much net profit is generated as a percentage of revenue, calculated as Net Profit / Revenue. Used as an indicator of a company's financial health.
- EBITDA deductions.
- EBITDA Margin
- Interest Coverage Ratio debt.
- NET Profit Margin
- Net Debt
- Net Equity
How well a company can pay all of its debts if they were due immediately calculated as Short-term Debt + Long-term Debt - Cash and Cash Equivalents. Used as a liquidity measure to assess if a company will need additional funding.
Interest-Bearing Debt
Liabilities that require the payment of interest, contains bonds, other loans, leasing liabilities etc. Interest-Bearing Debt has a priority over other debts.
The goal of alternative performance measures is to provide investors with performance measures that are widely used when making investment decisions and comparing the performance of different companies.
* As stipulated by FCMC Regulations on Alternative Performance Measures
How much undistributed equity a company has, calculated as Equity minus Loans to shareholders and related parties. Represents the amount of money that would be returned to a company's shareholders if all of the assets were liquidated and all of the company's debt was paid off.
Profitability and debt ratio, calculated as Earnings before interest and tax / (Interest expense). Used to determine how easily a company can pay interest on its outstanding
SIA DelfinGroup Skanstes iela 50A
+371 66 15 50 06
www.delfingroup.lv