Ferratum Oyj Corporate Presentation 1
Important Notice This presentation contains, or may be deemed looking statements. By their nature, Nothing in this presentation constitutes to contain, forward-looking statements. These forward-looking statements involve risks and investment advice and this presentation shall statements relate to future events or future uncertainties because they relate to events and not constitute an offer to sell or the solicitation financial performance of Ferratum. Such depend on circumstances that may or may not of an offer to buy any securities of Ferratum or statements are based on the current occur in the future. Future results may vary from otherwise to engage in any investment activity. expectations and certain assumptions of the results expressed in, or implied by, the Ferratum’s management, of which many are forward-looking statements, possibly to a beyond the Ferratum’s control. The words "aim", material degree. All forward-looking statements "anticipate", "assume", "believe", "continue", included herein are based on information "could", "estimate", "expect", "forecast", presently available to Ferratum and, accordingly, "guidance", "intend", "may", "plan", "potential", Ferratum assumes no obligation to update any "predict" "projected", "risk", "should", "will" and forward-looking statements, unless obligated similar expressions or the negatives of these to do so pursuant to an applicable law expressions are intended to identify forward- or regulation. 2
01 Business overview 3
Pioneering digital lender Consumer Business Mobile loans loans bank Founded EU Banking Frankfurt Helsinki Licence Prime 2005 Standard years of active 12 1.6M 24 countries profitable & former growth customers € 50M Q1 2017 revenue +51% y-o-y growth € 154M +39% 2016 revenue y-o-y growth 4
Our growth strategy Product diversification Sustainable profitable growth Develop Geographic leading expansion Mobile Bank 5
Our product suite Investing Banking Lending Consumers P2P Lending Mobile, 100% online, multicurrency, real time transaction accounts Microloans €25 – €1000 Shares in Ferratum bundled Loan Series 7 – 90 day term Current account Instant access Plus Loans €300 – €5000 Availability monthly release 2 – 36 month term Term deposit 3 – 12 months Loan Series Term 12 months from Credit Limit Digital revolving reference month credit line up to €3 000 Overdrafts Prime Loans €3 000 – €20 000 Capital guarantee 85% secured Mastercard Contactless multicurrency debit card 1 – 10 years by Ferratum Business (SMEs) Average net annualised return 8.9% Working Up to €100k capital 6 – 18 month term Ferratum offers digital solutions across the spectrum of financial needs 6
Credit Limit and PlusLoan growth driven by the success of Microloans Revenue Split Revenue Split Revenue structure by products New market 3M 2016 3M 2017 in 3M 2017 launches in 2016 & 2017 Currently active in: Primeloan (Q2) n.a. 1 market Currently active in: Ferratum P2P n.a. 1 market Currently active in: Mobile Bank n.a. 3 markets Currently active in: Ferratum Business (SME) EUR 2.4 million +402.1% y-o-y 1.4% 4.8% 5 markets Currently active in: Credit Limit EUR 22.3 million +61.5% y-o-y 41.6% 44.6% 10 markets PlusLoan EUR 11.3 million Currently active in: 11 markets 16.4% 22.6% +106.9% y-o-y Microloan EUR 14.0 million Currently active 40.4% 27.9% +4.1% y-o-y in: 21 markets Revenue split and revenue structure based on unaudited figures 7
Ferratum Mobile Bank • Fully automated, easy, fast account opening • Multi currency, multi language, freemium model • Extensive suite of services from current account to savings, credit card and foreign exchange transfers; more planned • Scalable API architecture enabling rapid rollout of third party service integrations • White labelling enabling bespoke mobile banking solutions for traditional banks and consumer facing businesses • Mobile model allows Ferratum to develop innovative new digital features such as location based services, biometric security for an enhanced customer experience Value for Ferratum Funding Credit Scoring Loyalty Commission Partnerships Data & Fees 8
Extensive mobile banking product suite Overdraft MasterCard debit card Current Account Savings Account Term Deposit ✓ ✓ Flexible savings account ✓ Fixed term deposit ✓ Overdraft facility to provide ✓ Multicurrency debit card Linked to deposit card flexible access to funds ✓ ✓ Interest rate may change ✓ 3, 6 and 12 months deposits ✓ SMS/Notification from each Multicurrency (today 7 when balance is low different currencies supported) day to day available purchase ✓ Available overdraft from ✓ ✓ No links to cards ✓ Minimum deposit €50 ✓ Temporary/permanent Only one account/currency 50- 5000€ based on credit block from App ✓ ✓ Unlimited balance ✓ Maximum deposit 100 000€ Current account can be linked score ✓ PIN change from App to Overdraft ✓ Fees based on actual daily ✓ Paypass contactless usage of Overdraft. payment ✓ Linked to one current account 9
Growth through partnerships Third party services and tech integration White labelling • • Delivering plug-and-play solutions for banks Ferratum Mobile Bank as the hub for an ecosystem of around the world to expedite transition to services modern mobile banking • A compelling route to market for partners offering • Bespoke financial service customer engagement innovative services via Mobile solutions for consumer facing businesses, eg • API-based widget to deliver tailor-made partner services travel, utility, entertainment • • Large addressable markets for future growth Focus on integrations to deliver increased engagement and revenues Scalable mobile banking platform offers exciting benefits for Ferratum, partners and customers 10 10
02 Financial Highlights 11 11
Solid annual growth Revenue (EUR million) Operating profit – EBIT (EUR million) 154.1 21.1 16.5 +28.3% 111.0 +38.8% 10.6 +55.3% 70.5 +57.4% FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016 Profit before tax – EBT (EUR million) Profit for the period – EAT (EUR million) 14.7 13.0 12.4 10.9 18.6% +18.6% +94.5% +90.2% 6.5 5.6 FY 2014 FY 2015 FY 2016 FY 2014 FY 2015 FY 2016 12 12
Q1 2017 Highlights • Revenue of EUR 50.0 million – up 51% year-on-year • Operating profit (EBIT) of EUR 6.8 million – up 32% year-on-year • EBIT margin of 13.7% • Positive operating cash flow of EUR 1.9 million • Profit before tax (EBT) of EUR 5.9 million – up 57% year-on-year • EPS (basic and diluted) increased 53% to EUR 0.23 per share • Maturing EUR 20 million Ferratum Bank p.l.c. bond repaid with proceeds from EUR 25 million senior unsecured bond issued Q4 2016 • Net financing costs decreased by 36% to EUR 0.9 million (Q1 2016: EUR 1.4 million), benefitting from FX gains in Q1 2017 vs FX losses in Q1 2016 • Net book value of loan portfolio grew by 12% to EUR 206 million (Q4 2016: EUR 184 million) • Deposits from customers further increased by 17% to EUR 118.8 million • Active/former customers increased by 335,967 (26%) to 1.65 million 13 13
Growth momentum continuing into 2017 Revenue (EUR million) Operating profit – EBIT (EUR million) 6.8 50.0 5.2 +31.9% 33.2 +50.6% +101.0% 2.6 23.0 +44.2% Q1 2015 Q1 2016 Q1 2017 Q1 2015 Q1 2016 Q1 2017 Profit before tax – EBT (EUR million) Profit for the period – EAT (EUR million) 5.9 5.0 3.8 3.3 51.5% +56.8% +52.5% +48.6% 2.6 2.2 Q1 2015 Q1 2016 Q1 2017 Q1 2015 Q1 2016 Q1 2017 14 14
Steady quarterly revenue growth and profitability momentum 2015 2016 2017 50 EUR million 50 45,5 Compound quarterly growth rate +10.2% 38,2 40 37,2 33,2 31,8 29,4 30 26,8 23.0 20 10 6,9 6,8 5,9 5,2 4,9 4,3 4,2 3,7 2,6* 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Revenue EBIT * Including IPO related costs in the amount of EUR 488,941 recognised as operating expenses in Q1 2015 15 15
Revenue growth supported by balanced regional growth EUR ’000 4,671 7,203 10,461 13,000 Q1 2016 Q1 2017 13,285 18,972 Total 33,213 Total 50,009 4,796 10,834 Region 1 (Finland, Sweden, Denmark, Norway) Region 2 (Netherlands, UK, New Zealand, Australia, Canada) Region 4 (Bulgaria, Romania, Croatia, Spain, Germany, France, Mexico) Region 3 (Estonia, Latvia, Lithuania, Poland, Czech, Slovakia, Russia) 16 16
Revenue and Profit before tax (EBT) grow by more than 50% EUR ‘000 • Impairments in line with management Q1 2017 Q1 2016 % Change expectations Revenue 50,009 33,213 +50.6% • Marketing efficiency improving Other income 13 8 +62.5% • EBT growing more than EBIT due to FX Impairment of loans (17,180) (9,548) +79.9% gains in Q1 2017 Operating expenses (25,991) (18,479) +40.7% • Tax ratio increasing from 12% 2016 to Selling & marketing expenses (7,877) (6,724) +17.1% 15% in 2017 EBIT 6,849 5,193 +31.9% Net financial costs (903) (1,400) -35.5% EBT 5,946 3,792 +56.8% Income tax (892) (455) +96.0% Net profit 5,054 3,337 +51.5% Earning per share, basic (EUR) 0.23 0.15 +53.3% Earning per share, diluted (EUR) 0.23 0.15 +53.3% 17 17
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