Delfin Group — Investor Presentation 2024

Sep 5, 2024

Investor presentation

Public bonds offering 2024

Disclaimer

This presentation is of selective nature and is made to provide an overview of the business of AS "DelfinGroup" and its subsidiaries (hereinafter together – "Company"). Unless stated otherwise, this presentation shows information from consolidated perspective. Facts and information provided in this presentation might be subject to change or revision in the future.

This presentation may include "forward-looking statements", which include all statements other than statements of historical facts, including, without limitation, any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "plans", "could" or similar expressions or the negative thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future Any forward-looking information may be subject to change.

This presentation is not a legally binding document and it has been prepared for information purposes only. Neither the Company nor any other person accepts any liability whatsoever for any direct or indirect loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. This presentation does not intend to contain all the information that investors may require in evaluating the Company. The presentation does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of the Company. Investors should inform themselves independently before taking any investment decision and read publicly available information regarding the Company.

Company overview Products & performance Industry & geography Financials

Q&A session

Company overview

Products & performance

Industry & geography

Financials

Q&A session

Who we are

DELFINGROUP

is a Latvian fintech company that offers accessible, simple, and consumer-focused finance and pawn services. In addition, to foster a circular economy, DelfinGroup sells pre-owned goods.

We have established an extensive network of branches and a robust online presence, ensuring we are easily accessible to everyone.

Main business segments

• Consumer lending
• Pawn lending
• Retail of pre-owned goods

DGR1R Listed on Nasdaq Baltic Main List

Market leader

Consumer and pawn lending industry leader in Latvia

Trusted bond issuer

12 bond issues out of which 7 has been repaid

Services available via • Mobile app • Web page

• Online store
• Branch network

Brands

What we do

Consumer lending Pawn lending Retail of pre-owned

• Installment loans, credit line

• Up to EUR 10,000
• Available via mobile app, web, branches
• Loans secured with item collateral
• Up to 95% of collateral value
• Available via branches and online

• Most popular items are jewelry, mobile phones, computer equipment etc.

goods

• Guarantee up to 24 months
• Available via online stores and branches

How we do it

High corporate governance standards

• Professional and driven management team
• Independent supervisory board members
• Three supervisory board committees

Focus on product digitalization

• Virtual card
• Digital pawnshop
• Online stores
• Remote purchasing of goods

Accessibility

• Inclusive financing
• Pawn loans provide access to funding for

everyone

● Available online and in branches

Sustainability

• ESG reporting since 2020
• Promotion of circular economy principles

Banknote branch network

38

presence in cities

branches in Latvia and Lithuania

branches in Riga

Operations in Lithuania started at the end of 2023. At the time of the bond offering, DelfinGroup has 7 branches in Vilnius.

Historic timeline

Launch of digital

Company overview

Products & performance

Industry & geography

Financials

Q&A session

Consumer loans

Consumer loan net portfolio

Average loan*

Weighted average term of loans issued

• Advanced scoring models. Approval rate of 20% from total applications.
• In 2023, 81% of consumer loans were issued online, while 19% in branches.
• Around 90% of loans are transferred via bank transfer, remaining 10% as cash transactions.
• To promote financial inclusion, DelfinGroup provide tailor-made loans for senior citizens. 28% of clients are over 60 years old.

Pawn loans

Pawn loan issuance

Average pawn loan

Active pawn net loan portfolio*

• € Pawn loans are the most accessible financial product.
  • Client's liabilities end at the maturity. Credit history is not affected.
  • Pledge valuation depends on the type of the item.
  • The total transaction time is up to 15 minutes.
  • Unredeemed pledges are sold at Banknote online stores or the branch network.

Retail of pre-owned goods*

Sale of pre-owned goods**

Gross margin

• In total, more than 80,000 verified and pre-owned items are available to clients.
• Online store sales in 6M 2024 increased by 61%, reaching EUR 1.8 million.
• More than 37,000 units were sold at the online store in 2023

veikals.banknote.lv

Sales split by product category (6M 2024)

*Excluding wholesale of precious metals (scrap). **Including directly purchased goods from clients and unredeemed items from pawnshop.

Company overview

Products & performance

Industry & geography

Financials

Q&A session

Industry overview

DelfinGroup consumer loan portfolio vs Industry DelfinGroup pawn loan portfolio vs Industry

• DelfinGroup is one of the largest non-bank consumer lenders in Latvia.
• 14.1% market share by consumer loan issuance in 2023.
• DelfinGroup has managed to increase its market share and become one of the industry leaders.
• DelfinGroup has been a disruptor of the pawn lending market since 2009.
• 57% market share by pawn loan issuance in 2023.
• Industry was affected by Covid-19 restrictions since it operated only offline.

Sources of market share: Consumer Rights protection Centre CRPC; DelfinGroup internal calculations

Expansion in Lithuania

OPPORTUNITY CURRENT SITUATION

Branch network

There are 7 Banknote branches in Vilnius. The company plans to significantly expand the network in the largest cities in Lithuania.

Product offering

Currently pawn loans and retail of pre-owned goods are offered.

Consumer lending licence

In summer 2024. company received consumer lending licence in Lithuania. It is expected to start providing consumer loans during Q3 2024.

Expansion opportunity

The fragmented pawnshop market in Lithuania presents a significant business opportunity.

Leveraging experience

We utilise over 14 years of knowledge and expertise gained in the Latvian market.

Lucrative market

The larger Lithuanian market provides ample growth opportunities.

Company overview

Products & performance

Industry & geography

Financials

Q&A session

Revenue diversification

Financial highlights

Total revenue

EBITDA

• Rapid expansion of loan portfolio since the IPO in 2021.
• Every quarter since the IPO, DelfinGroup reached record-high revenue on loan portfolio amounts.
• Quarterly revenue has grown 134% in Q2 compared to Q3 2021 (time of the IPO).
• Profits of the company have grown alongside revenue increase.
• Profit before tax rose 15% in 6M 2024.

Financial ratios

EBITDA (€m) & EBITDA margin

Net profit (€m) & Net profit margin

Capitalization ratio & covenant level

Interest coverage ratio, x & covenant level*

• 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 20.0

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Portfolio quality

Consumer lending portfolio age analysis*

• Low level of NPLs due to data-based scoring models.
• A professional in-house collection team ensures loan collection.
• Loans exceeding 60 days past due are subject to debt sales.

Capital structure

Capital structure 30.06.2024

DelfinGroup on Mintos

• Since 2016
• 80+ thousand active investors
• Investors from 100+ countries

Bond financing track record*

• Bond financing has been a crucial source of funding since 2013.
• Five bond issues ensure distributed maturities over the years.
• All the historic bond issues have been redeemed on time with no delays.

Funding

Diversified funding is ensured by:

• 3 unsecured bond issues
• 2 subordinated bond issues
• 2 bank loans
• 1 P2P investment platform

Liabilities (€m) Liability maturities 2024 (€m)

• Liability maturities distributed across the years
• Avoidance of one large maturity which decreases refinancing risk
• Bonds account for 54% of borrowings.

Key investment highlights

1 2 3

Professional management and corporate governance Diversified product portfolio

Strong financial standing

4 5 6

High-quality loan portfolio

Diversified funding structure

Bond offering Timeline

Type of notes	Unsecured notes
ISIN	LV0000803914
Issue size	EUR 15,000,000
Coupon rate	10%, paid monthly
Nominal value; Minimum investment amount	EUR 100
Maturity	25 September 2028
Type of placement	Public offering in Latvia, Estonia and Lithuania
Use of proceeds	Refinancing of existing bonds maturing on 25 September 2024 and other liabilities
Call option	102% after 1st year, @101% after 2nd year, @100% 6 months before maturity
Financial covenants	• Capitalization ratio of at least 20%
	• Interest coverage ratio of at least 1.5
	• (Net Loan Portfolio + Cash and Cash Equivalents – Mintos Debt Security – Bank Debt Security I) / (all unsecured interest-bearing debt* - Subordinated Debt)>=1.2x
Admission to trading	Nasdaq Riga Baltic Bond List within

Q&A session

AS DelfinGroup

Skanstes street 50A Riga, Latvia, LV-1013

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