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Slovar Limited Investor Presentation 2021
17773_rns_2021-05-18_2a51ec02-a9cc-4470-aa22-4f31c3d506f6.pdf
Investor Presentation
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ASX: MNY
money3
Canaccord Investor Presentation
19 May 2021
Scott Baldwin
Managing Director
Brad Dale
Automotive Financial Services
About money3
Customer focused, Consumer & Commercial finance company
Strong brands across Australian and New Zealand
Ubiquitous customer journey from introducer to loan settlement – driven by proprietary technology with strong integration with introducers software
Faster approval process – Time To Yes (TTY)
Large addressable market across Australia & New Zealand covering new and used assets for consumers and commercial purposes
Market leading collections via our Customer Care teams
Strong proprietary technology allowing for seamless integration of third party loan books
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Highlights - YTD (Q3 FY21)
money3
REVENUE
increased
12.5%
to $105.0m
on pcp
EBITDA
increased
34.6%
to $59.9m
on pcp
NPAT
increased
25.4%
to $28.6m
on pcp
24.3% in amount lent
in Q3 FY21 (over pcp)
Lending momentum continues to build
with Apr-21 above Q3 monthly average
Acquired GMFA and AFS businesses
adding $70m to group loan book
ORGANIC LOAN
ORIGINATIONS
(cash advanced)
14.0%
increase on pcp
to $231.2m
(plus $70.0m receivables
acquired via business acquisitions)
LOAN BOOK
increased
28.3%
since June 30 to
$556.7m
(including acquired
businesses)
CASH COLLECTION
increased
26.3%
to $252.2m
on pcp
Strong cash collections maintained post
Government stimulus roll-off
Favourable trading conditions in New
Zealand continue to drive strong
growth
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Strong loan book growth
Strong organic book growth and acquisitions at start of 2H FY21, provides a solid foundation for FY22 results
Loans acquired from GMFA absorbed by Money3's collection team
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Group - Capital Structure
Existing debt facilities support loan book growth to -$800m²
Retained earnings and improving leverage will support future increase in debt capacity
Expanding addressable market & market share is driving strong growth momentum
Return on Equity (RoE) to grow towards 20% in 2-3 years with increasing leverage as new debt facilities are utilised
^ includes deferred revenue and impairment provision on loan book
^ assumes Fortress debt is repaid at the end of FY21
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AUTOMOTIVE FINANCIAL SERVICES
Automotive Financial Services - Overview
Fast track product launch into near prime market
Leverage existing distribution driving scale
Introduction of direct to Dealer distribution
Strong loan book quality allowing for significant loan book leverage
Revenue growth
Funding diversification from large Australian bank
Successful business model and experienced management team
Go Car Finance's success provides an acquisition blueprint - with respect to loan book and profitability growth
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The Market
Australia
- 25.8m population
- 19.8m registered vehicles
- Registered vehicles increasing by ~300,000 vehicles per annum
- Average age of 10.4 years
- Over 50,000 active loans - 1/380 vehicles are funded by Money3
- Annual market opportunity
- >$1bn¹ in used vehicle financing to sub prime applicants
- >$3bn¹ in used vehicle financing to near prime applicants
- >$23bn¹ in Commercial loan applicants
Source (Australia):
sbn.gov.au
¹ Money3 estimates
New Zealand
- 4.9m population
- 5.5m registered vehicles
- Registered vehicles increasing over 2% per annum over the last 10 years
- Average age of 14.4 years
- ~10,000 active loans - 1/550 vehicles in New Zealand are funded by GCF
- NZ$9.5bn² annual motor vehicle sales
Source (NZ):
New Zealand population (2021) - Worldometer (worldometer), info rnta.gov.nz
² December 2020 Motor Fox published by the Financial Services Federation
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Distribution - Access where customers want it
- Strong Broker presence with over 30 years¹ in market
- Supported by over 1,000 individual Brokers across Australia and New Zealand
- API interface for application process embedded into Broker systems / CRM providing seamless data flow between Money3 and Brokers from application stage to credit approval and loan settlement
- Money3’s Internal Broker team supports Brokers with application and document administration increasing processing efficiency
- Process designed for online customers wanting to buy / maintain a vehicle or take a personal loan
- Targeted marketing and ease of website application workflow attracting significant lead volumes
- Fastest growing channel with ~45% of new loan origination in FY21 (~35% in FY20) in Australia, improving the cost of client acquisition
- Dedicated team to service returning customers created in Nov 2018 – Returning customers book grew 83% in the last 12 months to $53m
- Customer for life – Customers rewarded each time they return with improving rates and terms, opportunity to move customers from Money3 to AFS product as their credit quality improves
- Dealers use proprietary application software to gain immediate conditional approval, often while the customer is still in the dealership
- Providing Dealers with an additional finance relationship
- Automotive focused finance company, we speak the Dealers language
money3
1 Automotive Financial Services
Money3 Group - Products
money3
Non-conforming loans - Australia
- Flexibility key for customers
- Same day approvals
- 7 out of 10 customers engage digitally (no hardcopy paperwork)
- Pre-Approval so customer can choose the car they want and negotiate with a dealer
- -80% of applications received digitally
- Able to cater for old school customers wanting face to face service
- 1 in 3 customers borrow again
Products
- Automotive & Personal loans (consumer)
- Up to $75,000
- Up to 60 month terms
- Interest rates from 16.95%
- No Penalty for early payout
Consumer & Commercial - Australia
- Auto and Leisure specialists
- 1 in 5 applications automatically approved
- Dedicated assessment specialists for older and used assets
- No restriction on type or age of financed asset
- Simple, Fast Application & Settlement process
- Fast Approval Process - Time To Yes (TTY)
- Digitised Service and Delivery, backed by Systems and Compliance
- Growing Brand, Peak Performance Culture
Products
- Asset loans (consumer & commercial)
- Loan amounts from $5,000 up to $150,000
- Up to 84 month terms
- Interest Rates from 4.79%
Go Car Finance
Goes way further
Consumer loans - New Zealand
- Auto loan specialist
- Automated loan pre-approval in under 15 minutes
- Product heavily integrated with Dealer distribution
- Transport Solution - Complementing vehicle ownership product smooth cost of ownership over the life of the loan
- Go Connect devices to manage vehicle compliance
Products
- Automotive & Personal loans (consumer)
- Up to $100,000
- Up to 60 month terms
- Interest rates from 7.95%
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FY21 - Outlook
Forecast NPAT $38m
- Strong new loan originations and favourable economic conditions driving increase in profit expectation
- Loan growth and operating leverage through Technology will drive ROE to ~15% in FY22
- Strong cash collections expected to continue in Q4
- Expect used vehicle pricing to stabilise
- Expect to carry a large number of pre-approved loans in FY22, due to delays in new asset delivery
money3
Appendix
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Q3 FY21 Financial Results
| Unaudited Group Financial Results (YTD Q3 FY21)
Amounts in Smillion unless otherwise stated | Actual | PCP^ | Mvt % (vs PCP) |
| --- | --- | --- | --- |
| Revenue | 105.0 | 93.3 | 12.5% |
| Bad debts, net | (12.7) | (16.3) | 22.1% |
| Movement in impairment provisions | (1.4) | (3.7) | 62.2% |
| Expenses | (31.0) | (28.8) | (7.6%) |
| EBITDA | 59.9 | 44.5 | 34.6% |
| EBITDA as % of revenue | 57.0% | 47.7% | |
| NPAT (continuing operations) | 28.6 | 22.8 | 25.4% |
| NPAT Margin
(continuing operations) | 27.2% | 24.4% | |
^ PCP excludes effect of AF5 and GMFA acquisitions
12.5%
Increase in
Revenue
34.6%
Increase in
EBITDA
25.4%
Increase in
Group NPAT
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Disclaimer
The content of this presentation has been prepared by Money3 Corporation Limited (the Company) for general information purposes only.
Any information included in this presentation on COVID-19's impact on future financial performance, including industry sectors, income, profit and employment types, represent estimates of management. However due to the unprecedented nature of the events, these views are inherently uncertain and Money3 takes no responsibility for the accuracy of such views.
Any recommendations given are general and do not take into account your personal circumstances and therefore are not to be taken as a recommendation or advice to you.
You should decide whether to contact your financial adviser so a full and complete analysis can be made in respect to your personal situation.
Whilst all care has been taken compiling this presentation neither the Company nor any of its related parties, employees or directors give any warranty with respect to the information provided or accept any liability to any person who relies on it.
money3
Managing Director
Scott Baldwin
Telephone: +61 3 9093 8255
Email: [email protected]
Chief Financial Officer
Siva Subramani
Telephone: +61 3 9093 8246
Email: [email protected]
Investor Relations
Simon Hinsley
Telephone: +61 401 809 653
Email: [email protected]
Footnotes
Motor Vehicle Census, Australia, 31 Jan 2020 | Australian Bureau of Statistics (abs.gov.au)
Fleet statistics | Ministry of Transport
Fleet statistics | Ministry of TransportAnnualFleetStatistics.pdf (transport.govt.nz)