F i n a n c i a l Ye a r 2 0 1 9 P r e s e n t a t i o n 2 0 A u g u s t 2 0 1 9 Scott Baldwin Siva Subramani Managing Director Chief Financial Officer
Focused on a larger market Originated loans for over 500,000 customers Money3 is focused on the vehicle finance market with a significant opportunity to expand its lending to consumers that are underserviced while beginning to service a broader market Over $1bn lent to customers since inception Money3 is a specialist Deployable capital of 1 / 500 vehicles in provider of vehicle finance ~$100m. Money3 is focused Australia have a for the purchase and on expanding its market current Money3 loan maintenance of a vehicle. share, deploying this capital The Company has in FY20 to achieve ~30% successfully entered the growth of gross loan book New Zealand market in 1 / 800 vehicles in New FY19 via the acquisition of Zealand have a current Go Car Finance Go Car Finance loan Responsible lending Unique approach to has been the customer care, provides cornerstone of our consumers with tailored sustainable lending and flexible repayments. practices Money3 has become the lender of choice for over 47,000 active customers 2 2 2
FY19 Highlights Money3 is well positioned to grow through its focus on vehicle finance and its expansion into New Zealand via Go Car Finance 15.4% 48.1% 24.6% INCREASE INCREASE INCREASE Australian Revenue Revenue in Australian in Gross Loan (continuing operations) Gross Loan Book in Revenue to (continuing operations) 90 Revenue ) to Book to 120 $91.7 million 400 $85.0 million 80 $374.0 Entered 350 million 1 100 70 ASX 300 300 60 80 $ million $ million $ million 250 50 60 200 40 $374.0 million 1 $91.7 million $85.0 million 150 30 40 Exited SACC – Now a 100 20 20 dedicated provider of 10 50 vehicle finance 0 0 0 1 2 17.1% 9.4% NZ Loan Book Normalised NPAT 70 17.3% INCREASE INCREASE Group EBITDA INCREASE in Normalised in New Zealand Loan 40 (continuing operations) 60 Successful integration NPAT to Book to in Group EBITDA 50 35 $35.0 million $63.6 million since of Go Car Finance to $47.5 million 45 50 acquisition 30 40 40 35 25 $ million $ million $ million 30 20 30 25 $47.5 million 15 $35 million 20 20 Record number of 15 10 originations in FY19 10 10 5 5 0 0 0 3
FY19 Financial Results Normalised NPAT Group Financial Results FY19 FY19 FY18 Mvt % Amounts in $m unless otherwise stated (continuing operations) 24.6% Amounts in $m unless otherwise stated Normalised NPAT 35.0 Increase in revenue Revenue 91.7 73.6 24.6% One-off items Expenses 44.2 33.1 33.5% Loss on sale (Goodwill) 5.5 EBITDA 47.5 40.5 17.3% Acquisition cost – Go Car Finance 0.3 17.3% EBITDA as % of revenue 51.8% 55.0% Statutory NPAT 29.2 NPAT 24.2 21.2 14.2% Increase in Group EBITDA 26.4% 28.8% NPAT as % of revenue EPS (Basic) 13.48 13.17 2.4% Statutory NPAT FY19 cents per share Amounts in $m unless otherwise stated Note: Expenses increased as a result of: 14.2% • One-off Go Car Finance acquisition and integration costs NPAT – continuing operations 24.2 • Investment in increased business development in Australia Increase in Group NPAT NPAT – discontinued operations 5.0 Expenses FY20: • Revenue growth to exceed expense growth in FY20 Statutory NPAT 29.2 as acquisition and divestment synergies take effect 4
High Correlation cash collection & profit Cash Conversion Metrics FY19 FY18 23.6% Amounts in $m unless otherwise stated Income statement Increase in Australian operations Statutory NPAT 29.2 32.0 principal and interest Add: Impairment expense 25.7 20.8 cash collected Add: Loss on sale (Goodwill) 5.5 - ($189.7m) on FY18 Cash NPAT 60.4 52.8 Cash flow statement Net cash flows from operating activities (excluding 61.2 51.5 loans advanced) Net operating cash flow 61.3 51.5 Cash conversion 98.7% 102.5% 5
Australia - Strong growth in originations and cashflow 28.2% Loans Originations Cash metrics Loan Count ($m) (‘000) $200 20 19 Increase in Australian loans 15 $160 16 15 advanced ($173.2m) on FY18 $120 12 11 9 $173 $80 8 $135 $130 $95 $40 4 $80 $- - FY2015 FY2016 FY2017 FY2018 FY2019 Originations $ Loans Settled (#) 6
Credit quality maintained Stable credit quality with 74.0% of the loan book Improved very strong loan book has a low risk of default growth in FY19 of 48.1% to (72.7% in FY18) quality of $374.0m receivables lowering bad debts in FY20, targeting 4.5% - 5.5% Customers with a medium risk of default, 24.6%, (FY18 Customers with a high 25.2%) are proactively risk of default were serviced by Money3’s 1.4%, down from 2.2% experienced customer care in FY18 team 7
The economy Money3’s perspective Customers are benefiting from Government tax rebates and incentives Australia has low 5% levels of unemployment MONEY3’S CORE CUSTOMER Go Car Finance customer - Hank DEMOGRAPHIC (pictured right), said: DOING WELL “What I found different between using Go Car Finance and dealing with another finance company was the friendly service and willingness to help.” Most customers are renting and are largely unaffected by tightening property market and lending criteria (interest only loans on investment properties, etc) 8
Growing our market share being the lender of choice in the segment Fast-growing vehicle Highly profitable portfolio finance loan book of of receivables $374.0m with deep knowledge lending to consumers under serviced Average loans of ~$12k with by traditional providers interest rates from 9.95% Dedicated customer care team takes a All loans amortise to $0 flexible and tailored over the loan term, approach – high touch, receivables have no strong customer ‘residual value’ risk relationships 9
Growing our market share Capacity to enter new market segments LOOKING AT FINANCE FOR ALL MODES Building on our Leveraging a seamless OF TRANSPORT digital productivity loan origination strategy platform across customer market The Money3 advantage: Money3 is focused on segments vehicle finance and is expanding Following Royal Commission and within the segment changes to responsible lending regulations, traditional lenders have tightened credit significantly, lending less and taking longer to Scope to supply finance not provide a decision just for cars, but also bikes and recreational vehicles (jet skis, boats, etc) Accessing cheaper Well capitalised with financing thanks to ~$100m in capital improved quality of immediately available earnings Vehicle maintenance, improvements and repair costs can be significant, this is a growing market segment for Money3 MONEY3 IS WELL PLACED TO BROADEN ITS CUSTOMER BASE 10
Australian automotive market opportunity Huge Market Money3 market share • $80bn+ 1 of annual vehicle sales Australian automotive market • 1 out of 500 registered vehicles • $20bn 2 annual market for consumer vehicle financing $20bn in Australia are currently • $6.3bn 3 is attributed to used vehicle financing financed by Money3 Money3 Opportunity • Money3 estimates it finances 3% of the used car market annually Growing • 19.5 million registered vehicles in Australia 4 • Over 1.2m new and 2.1m used vehicle sales annually • ~331,500 additional vehicles on Australian roads from 2018 to 2019 4 Market opportunity • ~$100m of available funds providing significant headroom for Servicing Gap loan book growth • Over 500,000 unique customers • Money3 estimates 4-5 million Australian’s are either not serviced or excluded by traditional lenders • Requires highly experienced customer care function to serve appropriately 1 Roy Morgan: Report - State of the Nation 27: Australian Automotive Industry accelerates towards ‘Decade of Upheaval’ – March 2017 2 Royal commission into misconduct in the banking, superannuation and financial services industry: Report - Some Features of Car Financing in Australia 3 ABS, 5671.0 Lending Finance, Australia, November 2018 (14 August 2019) Table 9 – Finance Commitments, for Motor Vehicles: Australia, Original ($000) <http://www.abs.gov.au/ausstats/abs@.nsf/mf/5671.0>. 4 Australian Bureau of Statistics: Report - 9309.0 - Motor Vehicle Census, Australia, 31 Jan 2019 11
Go Car Finance Successful integration of New Zealand business and growing fast 12
Go Car Finance Go Car prides itself on exceptional customer relations. With a 95% “likely Go Car Finance Go Car Finance has a to recommend” score, Go successfully integrated finance facility with Car sees one in five into Money3 and growing significant capacity at customers return to us for fast a leading bank their next new loan. For the direct team, three in five loans are thanks to returning clients. With 3.85m cars in New A$63.6m vehicle Zealand and Go Car’s finance loan book, strong brand, there is increasing 17.1% significant growth since acquisition opportunity 13 13
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