Growth Through Superior Customer Experience Investor Day December - - PowerPoint PPT Presentation

Growth Through Superior Customer Experience

Investor Day December 13, 2018

Preliminary Statements

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Forward Looking Statements This document contains certain forward-looking statements. These statements are based on the company’s current expectations as to the outcome and timing of future events. All statements, other than statements of historical facts, that address activities or results that the company plans, expects, believes, projects, estimates or anticipates will, should or may occur in the future are forward-looking

• statements. Actual results for future periods may differ materially from those expressed or implied by

these forward-looking statements due to a number of uncertainties and other factors, including

• perating risks, liquidity risks, legislative or regulatory developments, market factors and current or

future litigation. For a discussion of these and other factors affecting the company’s business and prospects, see the company’s annual, quarterly and other reports filed with the Securities and Exchange Commission. The company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. Other Information This information should be read in conjunction with, and not in lieu of, the company’s annual, quarterly and other reports filed with the Securities and Exchange Commission. Those reports contain important information about the company’s business and performance, including financial statements prepared in accordance with U.S. generally accepted accounting principles, as well as a description of the important risk factors that may materially and adversely affect our business, financial condition or results of operations. All market comparisons are based on available information from similar publicly traded companies.

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Opening Remarks

Stuart Grimshaw Chief Executive Officer

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Today’s Agenda

Opening Remarks Initiatives to drive long-term profitable growth Stuart Grimshaw, Chief Executive Officer Pawn Operations Differentiating factors that drive market share growth Joe Rotunda, Chief Operating Officer U.S. Pawn Significant scale and cash flow generation Eric Fosse, President, U.S. Pawn Latin America Pawn Scale and significant returns on store openings and acquisitions Francisco Kuthy, President, EZCORP Mexico Rodrigo Rodas, President, GPMX Systems / Technology Enhance customer engagement and returns with data and digitally driven future Mark DeBenedictus, Chief Customer Experience Officer Investor Day Recap Growth, returns, and strong cash flow Stuart Grimshaw, Chief Executive Officer Q&A

8:00 to 9:30

Small Roundtable and One-On-One Q&A EZCORP management and investors

9:30 to 10:00

Company Overview

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EZCORP is a leading provider of pawn loans in the United States and Latin America. At our pawn stores we also sell merchandise, primarily collateral forfeited from pawn lending operations and used merchandise purchased from customers. 99% of total revenue is from pawn operations 47% of EZCORP total pawn stores are now in Latin America, specifically Mexico, Guatemala, El Salvador, Honduras, and Peru. Increased our Latin America store count by 84% (+207 stores) in FY18

U.S. Pawn 53% Latin America Pawn 47%

EZCORP Pawn Store Count 9/30/18

KEY STATISTICS

IPO Date 8/27/1991 Headquarters Austin, TX Market Capitalization (52 Week Range as of 12/4/18) $490m to $814m Share Price (52 Week Range as of 12/4/18) $8.97 to $14.95 Convertible Debt Due 2025 Bond Price (Range from May 2018 offering completed) 82 to 104 Convertible Debt Due 2024 Bond Price (52 Week Range as of 12/4/18) 110 to 138 Convertible Debt Due 2019 Bond Price (52 Week Range as of 12/4/18) 98 to 108 Total Revenue in FY18 $813.5m Profit Before Tax in FY18 $57.1m Basic Earnings Per Share in FY18 $0.73 Diluted Earnings Per Share in FY18 $0.69 Institutional Holdings 89% Index inclusion: Russell 2000, S&P SmallCap 600, S&P 1000, NASDAQ Composite

PAWN STORE LOCATIONS as of 9/30/18

United States 508 Latin America 453

FINANCIAL SERVICES LOCATIONS as of 9/30/18

Cash Max in Canada Total Store Locations 27 988

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Successful Execution of Business Strategy Drives Strong Long Term EBITDA Growth

Compound PLO Growth, Acquisitions, and Expense Control Driving EBITDA Growth

Amounts in this slide are in millions and are adjusted for discrete items and constant currency. See “EZCORP GAAP Results” and “GAAP to Non-GAAP Reconciliation.”

EBITDA Consolidated

Fix & Simplify Build Growth Platform Long- Term Growth

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• Strong Same Store PLO:
• +7% in LatAm Pawn
• +5% in U.S. Pawn
• Consolidated EBITDA increased 17% to $100.6m
• Adjusted profit before tax increased 33% to $64.4m
• Market leading merchandise margin up 120bps to 37%
• Strengthened balance sheet: Cash balance up 74% to $286m and extended debt maturity

profile

• Consistent execution in organic growth, new stores and acquisitions
• 84% increase (+207 stores) in LatAm store count in FY18 to 453 stores
• Upgraded point of sale to drive higher returns on earning assets (higher PLO yield and

merchandise margin), includes Customer Grading and Dynamic Pricing

FY18 Recap

Proven management track record of execution and market share gains

Significant Increase in Latin America Store Count

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FY2018 Beginning 246 Acquired 196 New 12 Closed 1 Total 453

U.S. Pawn 53% Latin America stores on 9/30/17 Latin America net stores acquired

• r opened

in FY18

EZCORP Pawn Store Count 9/30/18

246

• 84% increase (+207 stores) in

LatAm store count in FY18 to 453 stores

• 47% of EZCORP pawn stores are in Latin

America as of September 30, 2018, specifically Mexico, Guatemala, El Salvador, Honduras, and Peru

• Strong presence diversified across five

LatAm countries provides springboard to growth within the high growth region, specifically Mexico, Guatemala, El Salvador, Honduras, and Peru

508 207

84% Increase in FY18

11.4% 11.8% 13.4% FY16 FY17 FY18

U.S. Pawn ROIC

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Driving Higher Returns on Increasing LatAm Investment and Operating Leverage

14.4% 21.0% 18.8% FY16 FY17 FY18

Mexico Pawn ROIC

12.4% FY18 FY22

GPMX ROIC Acquired in FY18

Return on Invested Capital (ROIC) is defined as Net Operating Profit After Tax (NOPAT) as a percent of total investment (including acquisition price, CapEx, and growth in working capital).

LATIN AMERICA PAWN

Investments that expand free cash flow growth and highest long-term return on capital

U.S. PAWN ~25%

LATIN AMERICA INVESTMENTS New Stores Acquisitions Relocations Target ROIC 5-Year ~35% ~25% ~30%

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Investment In Business

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207

Cash Flow and Investment In Business

FY16 FY17 FY18

Net Cash From Operating Activities $68.1 $58.0 $88.7 Fund PLO Growth (13.0) (15.6) (18.9) Operating Cash Flow 55.1 42.4 69.8 AlphaCredit Principal Repayments

• -

29.5 32.4 Cash Flow Including AlphaCredit 55.1 71.9 102.2 Capital Expenditures (13.3) (25.0) (40.5) Cash Flow After Capital Expenditures $41.8 $46.9 $61.7

$68.1 $58.0 $88.7

Cash Flow Up 53% YOY in FY18

$11 FY16 FY17 FY18

Amounts in this slide are in millions.

$11.1 $13.2 $16.2 AlphaCredit Principal Repayments CapEx

FY18 Receipts From AlphaCredit Invested In Business

Discretionary Reinvestment In Stores Other Investments For Growth Maintenance CapEx $32.4 $40.5

1 3 2

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EZCORP will also receive cash flow from operations and Alpha Note Payments available for these same purposes. We allocate capital to opportunities assuring any resulting ROIC significantly exceeds our WACC, to drive EPS accretion. Examples in this presentation of investments in acquisitions, new stores, relocations, etc. demonstrate this discipline and the

• utsized returns being delivered.

Cash Available For Investments

Amount Cash balance as of 9/30/18 $286 Cash convertibles due in June 2019

• 195

Remaining 91 Cash to run daily operations with a safety margin, fund loan growth, etc.

• 50 to 70

Resulting capital available for acquisitions, new stores, etc. ~$20 to $40

$ Millions

B B A

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Initiatives to Drive Continued Long-Term Profitable Growth and Shareholder Return

EZCORP’s Vision “To be the market leader in North America, within three years, in responsibly and respectfully meeting our customers’ desire for access to cash when they want it.” Stuart Grimshaw, CEO of EZCORP, July 29, 2015 Evolution, Growth and Returns

• 1. Relentless focus on serving and satisfying our customers’ need for cash

Customer experience leadership and market share gains create significant opportunities

• 2. Investments with long-term returns well in excess of weighted average cost of capital
• f ~9%* to drive accretion

Scale and continued significant returns on store openings and acquisitions in high growth markets

• 3. Enhance engagement with customer and returns with data and digitally driven future
• 4. Generate strong free cash flow with low maintenance capital expenditures

*After tax, inclusive of full GAAP interest expense of convertible debt.

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Operations

Joe Rotunda Chief Operating Officer

We serve a large market…

19% of U.S. households are underbanked (~24 million households)A Supplement their bank account with alternative financial services 7% of U.S. households are unbanked (~8 million households) A Don’t have a bank account 63% of Mexico population (~60 million people) and 45% of the remainder of LatAm population are unbankedB

The opportunity is larger…

In addition to underbanked and unbanked households: There are many others who are “cash and credit constrained” attributable to psychographic attitudes, aspirations, and other psychological criteria The “cash and credit constrained consumer” has inadequate access to cash or credit to satisfy basic needs (and / or wants) at a particular point in time We estimate ~one-third of U.S. Households are “cash and credit constrained” and larger in Latin America

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Our Customer

Cash and Credit Constrained Consumers’ Access to Cash

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CUSTOMER RELATIONSHIP DRIVEN We’re there when they need us

EZCORP LOAN COUNTER

RETAIL SALES & SALES GROSS PROFIT

FORFEITS

PAWN SERVICE CHARGES

Provide Cash to Customer

CUSTOMER VISIT

BUY PRODUCT

From Customer

DECISION PAWN OR SELL DECISION REDEEM OR FORFEIT

Loan value is established … NOT only on product, but even more importantly…

• n the customer relationship

Our Differentiating Factor

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Over 80% of EZCORP’s loan transactions result in a redemption or payment when due!

Today: Best in Industry Analytics

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PRODUCT

Historic [General Merchandise (GM)]:

• Proprietary resale pricing by manufacturer,

“model number” and “key attributes”

• Actual resale pricing of similar tier brands

with the same “key attributes” Direct Input [Jewelry & GM]:

• Pricing by Product Pricing Team

Physical Evaluation [All]:

• All adjusted by “condition” grading:

3 tiers

CUSTOMER

• Interaction with customer
• Qualifying questions
• Historic customer transactions
• Customer pickup rate
• Manual lending grid provides “loan to

value” multiplier of “resale value”

Today: Best in Industry Analytics Applied to a Manual “Lending Grid” Provides Product Analytics and Access to Customer Transaction History

Results in “Resale Product Price” Results in “Loan Value Range” DATA ANALYTICS

Transitioning to Automated Lending Grids

AUTOMATED

LOAN VALUE RANGE

AUTOMATED

Benefits:

• Increase Speed of Transaction
• Improve Productivity
• Greater Accuracy of Loan Values
• Enhance Customer Interaction

POS2: “Automated Lending Grids” Tomorrow: Move Toward “Intelligent” Lending

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Drivers to Long-Term Growth Investing in Pawn Fundamentals

19 Customer endorsement Record of market share gains Attractive industry dynamics International opportunity Incentives, rewards, and coaching Team Members Meeting customers’ need for cash Quality and scalability

CUSTOMER EXPERIENCE LEADERSHIP

Drives Strong Competitive Advantage

Diversified geographic footprint with continuing opportunities for store openings and acquisitions in high growth markets

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U.S. Pawn Operations

Eric Fosse President, U.S. Pawn

EZCORP U.S. Pawn Store Map

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EZCORP pawn platform supports geographic diversity of store mix Massive and highly fragmented market Stable state regulation; rate setting authority is at state level

NY WA MT ND SD WY

ID

NM KS NE MO KY LA SC NC WV OH MI ME VT MA NH CT RI PA VA 2 2 8 GA 96 FL AL 5 MS 1 AR 1 OK 21 TX 217 AZ 20 CO 34 UT 9 NV 17 OR 5 MN 7 WI 3 IA 11 IL 21 IN 15 TN 13 N J D E MD

508 EZCORP Stores

Store count as of 9/30/18

U.S. Pawn Taking Market Share!

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EXCELLING IN SERVING AND SATISFYING CUSTOMERS’ NEEDS

Same Store PLO Growth¹

Two-Year Stacked YOY Change

¹Weighted average based on available information from each company’s public filings. This information may be determined or calculated

differently by companies, limiting the usefulness of these measures for comparative purposes.

Amounts in this slide are based on company GAAP results, average store count, and per store amounts are in thousands.

EZCORP Public Pawn Competitor

PLO is the most influential driver of EZCORP revenue and profitability

U.S. Pawn Scale and Asset Quality!

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SUPERIOR STORE PERFORMANCE

Quarter Ended Sept 30, 2018

EZCORP

Public Pawn Competitor EZCORP Relative to Competitor Store Count 508 1070 EBITDA (YOY Growth) 15% 5% 3x Net Revenues per store $188 $144 31% Pawn Loans Outstanding per store $305 $261 17% Pawn Service Charges per store $124 $87 43% Average Monthly PLO Yield 14% 11% 300bps Sales per store $158 $151 5% Sales Gross Profit per store $61 $56 9% Merchandise Sales Margin 38.6% 36.8% 180bps Inventory Turns 1.9x 2.5x (.6x)

Amounts in this slide are based on company GAAP results, average store count, and per store amounts are in thousands.

EXCELLING IN SERVING AND SATISFYING CUSTOMERS’ NEEDS

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U.S. Pawn Strong Cash Flow Generation With Low Maintenance CapEx

Drivers to increase free cash flow and continue capturing market share:

• Quality lending / growth in PLO
• Operational excellence and leverage

the store base

• Performance based store incentive

programs

• Upgraded systems that include POS,

“Intelligent” Customer Grading, and “Intelligent” Dynamic Pricing That will drive higher:

• Return on earning assets
• PLO yield
• Inventory turns
• Sales gross profit
• Sales margin

$56.1 $64.6 $78.3 $1.7 $5.0 $3.2

FY16 FY17 FY18 Operating Cash Flow After Tax Maintenance CapEx

1 2

$ Millions

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Latin America Operations

Francisco Kuthy President, EZCORP Mexico Rodrigo Rodas President, GPMX

MEXICO (340)

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Latin America Pawn Store Map

HONDURAS (12) GUATEMALA (74) EL SALVADOR (17)

• 84% increase in LatAm

store count in FY18

Acquired 196 stores New 12 stores Closed 1 store Total 207 stores

246 Stores on 9/30/17

207 stores added in FY18

• 47% of EZCORP pawn stores

in LatAm

PERU (10)

Latin America Pawn Per Store Economics vs. Competition

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SUPERIOR EBITDA GROWTH

Quarter Ended Sept 30, 2018

EZCORP

Public Pawn Competitor EZCORP Relative to Competitor Store Count 453 1346 EBITDA (YOY Growth) 86% 2% 43x Net Revenues per store $59 $59 Equal Pawn Loans Outstanding per store $96 $81 19% Pawn Service Charges per store $43 $33 30% Average Monthly PLO Yield 15% 15% Equal Sales per store $54 $75 (28%) Sales Gross Profit per store $17 $27 (37%) Merchandise Sales Margin 31.2% 35.5% (430bps) Inventory Turns 2.7x 3.7x (1.1x)

Amounts in this slide are based on company GAAP results, average store count, and per store amounts are in thousands.

EXCELLING IN SERVING AND SATISFYING CUSTOMERS’ NEEDS

New Store Performance Relentless Execution and Leader in Customer Satisfaction

• NPS score of 55 in 2018 (+10% vs 2017)
• Same Store PLO growth of 7% (2018) vs.

negative YOY change at competitor

Remarkable PLO & EBITDA Growth

• PLO PSA CAGR 10.8% (2015-2018)
• EBITDA PSA CAGR 45% (2015-2018)

Why Mexico is a Key Region for EZCORP

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Amounts in MXP 000’s.

Breakeven

6

months

• Avg. PLO Per Store Similar to Legacy EZCORP Mexico Stores

By Month

22

ROIC 1Year

12%

New Store Performance

Analysis includes 20 new stores in Mexico in the last 24 months

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New Store Performance Successful Acquisition Strategy Relentless Execution and Leader in Customer Satisfaction

• NPS score of 55 in 2018 (+10% vs 2017).
• Same Store PLO growth of 7% (2018) vs.

negative YOY change at competitor

Remarkable PLO & EBITDA Growth

• PLO PSA CAGR 10.8% (2015-2018)
• EBITDA PSA CAGR 45% (2015-2018)

Why Mexico is a Key Region for EZCORP

Amounts in MXP 000’s.

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Successful Acquisition Strategy in Mexico

Source of PLO Growth $169 in 2018

Profitability Improvement Of Acquisitions

PLO

• Mo. Yield%

NR PSA(1) PBT PSA(2)

EZ Legacy 18% $4.7 $1.6 Total Acq 12% $2.7 $1.1 Growth Opp. 600bps 74% 45%

Expected 5 yr. Avg. ROIC on Acquisitions

• 1. Net Revenue per store average.
• 2. Profit Before Taxes.

Amounts in millions MXP

PLO Growth EZ Mexico 10% Acqusitions 34% Total 44%

~25%

FY18

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• 63% Unbanked adult population

represents (~60 million). Higher than remainder of LatAm at 45% and USA at 7%(2)

Growth Opportunity

Mexico Pawn Market

• 49 million people use non-banking loans(1)
• Less than 20% penetration of the pawn

industry(1)

• EZCORP has 340 stores in Mexico
• +7,000 stores and +900 brands(3)
• 16 large operators (50 stores or more) own over

1,122 locations

• 20% of population concentrated in 10 high

density cities(4)

Source 1 - ITAM Centro de Estudios de Competitividad, Perspectivas de la Industria Prendaria, Abril 2018, 2 - World Bank - Demirguc-Kunt et al., 2018, Global Financial Inclusion Database, World Bank, 3 - PROFECO registration data and Internal reports, 4 - INEGI

Large Unbanked Population Pawn Industry Penetration Massive and Fragmented Market

Market share by stores

EZCORP Mexico, 5% First Cash, 19% Donde, 5% NMP, 5% Montepio, 3% Mazatlan, 2% P Seguro, 2% Presta Facil, 3% 16 other large operators >50 stores, 16% ~ 900 other Small Operators <50 stores, 41%

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GPMX: Significant Returns and EBITDA Growth in First Year Since Acquisition

*Return on Invested Capital (ROIC) is defined as Net Operating Profit After Tax (NOPAT) as a percent of total investment (acquisition price, CapEx,, and growth in working capital since acquisition).

38% EBITDA increase

Quick adoption of best practices and changes in business model Expanding pawn lending on general merchandise fueled lending and sales growth

30%+ Target ROIC Store Investments

Increased size of 2 stores and relocated 7 stores with target ROIC of +30%* by year 5 Opened first large format (>3500 sq.ft.) store with target ROIC of 35%+ by year 5

12%* First Year ROIC*

Delivered first year ROIC on GPMX acquisition of 12%* On track for year 5 ROIC of ~25%* relative to EZCORP weighted average cost of capital of ~9%

Replicable Earnings Expansion Strategy

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GPMX Enhancements to Business Model – Store Relocation

Before After

CHANGES:

• Increased store size ~3.8x
• Large sales floor increased general merchandise

lending

• Increased store-front

Changes to stores have driven significant growth on PLO and sales

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GPMX Enhancements to Business Model – New Stores

• Large format stores ~3,500 sq.ft
• New stores average breakeven in ~8 months

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Latin America Expansion Opportunities

• Aggressively expanding in high growth markets
• Project Type

New stores breakeven in 8 months Expect to add 100 to 200 stores in Latin America in FY19 through acquisition and new store growth, and expand and relocate some existing stores particularly in GPMX

• Relentless focus on execution and best practice adoption
• Continue to improve lending practices
• Combine best in class operation expertise and local knowledge
• Invest in upgrading systems infrastructure to leverage new technology
• Preparing infrastructure for POS adoption
• In January 2019 we will launch an innovative customer service channel via WhatsApp Enterprise
• Continue to explore high growth opportunities in other LatAm countries

Type Target ROIC 5 Yr New Stores ~35% Acquisitions ~25% Relocations ~30%

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Systems / Technology

Mark DeBenedictus Chief Customer Experience Officer

New Time Tracking & Workforce Mgmt. System New Enterprise Business Intelligence System New Cloud Based Electronic Office New Big Data/Predictive Analytics Capability New Cloud Based Infrastructure

2018 to 2019: Year to Year Accomplishments

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2018

Upgraded POS New “Intelligent” Customer Grading New “Intelligent” Dynamic Pricing

Upgraded POS

New “Intelligent” Customer Grading New “Intelligent” Dynamic Pricing New Time Tracking & Workforce Mgmt. System New Enterprise Business Intelligence System New Cloud Based Electronic Office New Big Data/Predictive Analytics Capability New Cloud Based Infrastructure

2019

Completed In Deployment

Upgraded POS (POS2) Moment of Truth: Getting Our Customer the Cash They Need

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New POS

Upgraded POS

Progress To Date ✓ Deployed to select stores in 4 U.S. states and Mexico ✓ Minimize impact on store

• perations

✓ Roll out tempered to ensure highest quality – will continue into 2019 ✓ Added capability/functionality ✓ Focus on customer experience

POS2

Why POS2 – Getting Our Customers the Cash They Need Faster

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Experience Efficiency Functionality

Delivers a better experience to our customer by:

• Providing the ability to

see the total customer history on one screen

• Providing the ability to

quickly assimilate new employees in systems and processes – months to days/week

Processes can be executed faster through:

• Faster screens,

consolidated views, and automated processes

• A more efficient way to

extend/renew our most valuable customers – get them their cash

Added capability to reduce the burden of guess work by:

• Eliminating the need for

Team Members to be trained on pricing a complex set of goods

• Increasing yield and sales

velocity to maximize LTV and pricing discounting

• Enables scaling the

business via acquisitions

• Automated lending

Higher PLO yield, inventory turns, sales gross profit and sales margin

POS1 Experience - Multiple Screens and Clicks for Complete Customer View

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POS2 Experience - Comprehensive Customer Dashboard on One Screen

Aggregated Customer ID

Complete view of customer’s transaction history

Category Based Redemption Data

Top Volume Redemption Category Drill Downs

Color coded value labels for quick reference

Lifetime Lending and Retail History

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POS1 Efficiency- Separate Screen with Multiple Clicks for Each Loan Extension

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Cascading Payment Feature

Applies the same payment choices to all pending loans (time period or cash amount) Legacy POS requires data entry for each pending payment

Juan Ramos

POS2 Efficiency – Faster Transactions for High Value Customers

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POS1 Functionality - Many Data Sources Drive Pricing Complexity Requiring Significant Team Member Effort & Skill

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POS2 Functionality - Automated Loan to Value Based on Dynamic Pricing and Pickup Rate

Customer Dashboard Persist Throughout Transaction

• Based on customer’s redemption history &

market value of collateral

• Potential cost of goods % dynamically changes

as loan value is modified visually demonstrating impact of lending decision to margin %

System Provides Lending Range Guidance Dynamic Pricing Indicates the Confidence of the Item Match

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POS2 - Faster, Better Speed to Cash Using Intelligent Data Sequencing

San Antonio Regional Director of Operations

“Saves time, Management can focus on coaching and driving the business.” “We can now process multiple extensions with minimal clicks, this saves time and improves

• efficiency. It gives our TM’s the ability to take care of customers faster, improves service time and

stronger TM contributions.” “The new Loan Walk Report provides more detailed information compared to the old POS. This helps our SM’s to identify opportunities faster so that lending behaviors are aligned with company expectation. This is a great tool to support SM’s to build quality PLO growth.”

Experience

• Consolidated Single View of customer data and history
• Faster Customer Service for high value customers

Efficiency

• Flexibility & Speed in payment options (extend, renew and redeem)
• Easier Learning Curve for new team members

Functionality

• Automated Lending Guidance based on product and customer history
• Cloud Based for Scalability and Ease of Acquisition Integration

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San Antonio Regional Director of Operations

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“Intelligent” Customer Grading & “Intelligent” Dynamic Pricing

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Progress To Date

✓ Gen 0 - base models are in place and automated ✓ Gen 1 Next Phase - dynamic models and artificial intelligence ✓ POC completed ✓ Models finalized ✓ Business rules in definition

New POS

New “Intelligent” Customer Grading

New “Intelligent” Customer Grading New “Intelligent” Dynamic Pricing Why “Intelligent” Customer Grading & “Intelligent” Dynamic Pricing

✓ Increasing Yield ✓ Loaning more to customers who deserve more ✓ Maximizing sales gross profit through moving inventory faster

Rich Data to Drive Yield & Increase Sales Velocity

Customer Data Product Data

Advanced

Machine Learning Customer Risk Modeling

How Much Should I Lend?

The Pricing “Brain”

POS2

“Intelligent” Dynamic Pricing “Intelligent” Customer Grading

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GEN0

Evolution from a simple rules-based approach to a machine learning credit decisioning solution

GEN1

Customer Data Product Data Advanced Machine Learning Customer Risk Modeling

GEN1 Automated Data- Driven Lending Solution

Machine Learning algorithms find latent customer behavior patterns to predict loan

• utcome and inform optimal

lending decisions

• 24X more data
• 14X more features
• 5X credit risk fidelity
• 4X ML algorithms applied

Results from Machine Learning models are used to generate customer credit scores from which we derive

• ptimal loan ranges

that minimize risk and drive yield

How Much Should I Lend?

Product Features Include:

• Similarity of item value
• Total loan amount
• Location
• Time of Day
• Week and Month
• Holiday
• Other impactful data

Data from 7.5M loans, 220M data points and 300+ features

Customer Grading Models – Predicting Customer Behavior to Increase Yield

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Evolution from a simple pricing approach to an AI driven pricing solution

Today Tomorrow

Pricing Tables – Updated Manually and Use Limited Product Attributes Discount Cadence – All Locations and No Seasonality Considerations

The Pricing “Brain”

produces item, location and seasonal specific pricing to optimize sales velocity

Price Elasticity Curve (42’ Phillips LCD TV)

Internal Data + External Data Sets + Extended Product Descriptions = The Pricing “Brain”

• Over 114M data points

derived from 4M historical transactions

• 90K external data sets
• Fuzzy match

algorithms increase pricing accuracy

• AI algorithm learns

from every transaction

• Automated process

Simplistic, Hardcoded, Fixed Parameters & Single Configuration for all locations

Existing Price

Item sold for $150

Predicted Optimal Price

% % % % % %

Leveraging AI to Maximize LTV & Sales Velocity

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What We Are Exploring

• Digitization of our engagement and alternative mechanisms

to create a more robust presence in our customers financial life cycle

• Leveraging our important relationship to enhance our pawn

experience and to provide adjacent services, fulfilling our customers financial needs

• Maximizing international reach and scale
• Enabling efficient acquisition of customers to our pawn

experience

What We Know

• Millennials make up 50% + of our business (and

growing)

• Pawn is one of many services our customer requires
• Psychographics and demographics of our customers

are unique and valuable

• Fintech’s are trying to maximize this segment of

population

• Our industry is not immune to the evolution to digital

engagement and fulfillment

• We are uniquely positioned to maximize our

relationship and deliver value to our customers credit and cash needs life cycle

Enhancing the Future Pawn Experience by Developing an Alternative Digitally Driven Future

53

Coming Soon What’s the Value? - Driving Customer Acquisition

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55

Investor Day Recap

Stuart Grimshaw Chief Executive Officer

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• Relentless focus on serving and satisfying our customers’ need for cash

delivering market share gains and significant opportunities

• Proven management track record of execution and market share

gains

• Increasing cash generation from operating activities, up 53% YOY to

$88.7m in FY18 with low maintenance CapEx

• Growth and returns in LatAm with successful execution in organic

growth, new stores and acquisitions

• Investments with long-term returns well in excess of weighted average

cost of capital

• Enhancing customer engagement and returns with data and digitally

driven future

Investor Day Recap

57

Additional Information

58

Investor Resources

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Definition of Terms

Monthly PLO Yield = pawn service charges days in period average PLO X 365 Inventory Yield = sales gross profit days in period average net inventory X 365 Return on Earning Assets sales gross profit + PSC days in period average net inventory + average PLO X 365 Inventory Turnover = total cost of sales days in period average net inventory X 365 =

/ 12

EBITDA Margin = EBITDA net revenue

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GAAP to Non-GAAP Reconciliation

In addition to the financial information prepared in conformity with generally accepted accounting principles in the United States of America ("GAAP"), we provide certain other financial information that is adjusted to exclude the impact of restructuring and restatement charges and other discreet items and to reflect the results of our Latin America Pawn operations on a constant currency basis. We believe that presentation of the non-GAAP financial information is meaningful and useful in evaluating and comparing

• ur operating results across accounting periods and understanding the operating and financial

performance of our business. We believe that the non-GAAP financial information reflects an additional way

• f viewing aspects of our business that, when viewed with our GAAP results, provides a more complete

understanding of factors and trends affecting our business. We provide non-GAAP financial information for informational purposes and to enhance understanding of our GAAP consolidated financial statements. You should consider the non-GAAP information in addition to, but not instead of or superior to, our results prepared in accordance with GAAP. Non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of that information for comparative purposes.

61

GAAP to Non-GAAP Reconciliation Q4 – Continuing Operations*

(B) (C) (A) (E) Footnote * - Includes immaterial presentation reclassifications and rounding Footnote (A) Amount excludes $0.2m of acquisition expenses Footnote (B) Amount excludes $11.7m impairment on CCV investment and $0.1m loss on FX Footnote (C) Amount excludes tax impact of items listed above and $2.0m expense from revaluation of DTA as a result of tax reform Footnote (D) Amount excludes $0.2m Net Revenue Impact from Hurricanes Harvey and Irma Footnote (E) Amount excludes Hurricane Store Operating Expenses Impact Footnote (F) Amount excludes Acquisition Expenses Footnote (G) Amount excludes 1) $0.5m Empeño Credit and $2.5m Corporate Credit from Restructure of Grupo Notes Receivable, 2) $5.2m expense from debt extinguishment costs reclass

from Fortress notes and pay-down of 2019 converts Footnote (H) Amount excludes tax impact of items above *Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in Mexican pesos to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The end-

• f-period Mexican peso to U.S. dollar exchange rate as of September 30, 2018 and 2017 was 18.7 to 1 and 18.2 to 1, respectively. The approximate average Mexican peso to U.S. dollar

exchange rate for years ended September 30, 2018 and 2017 was 19.0 to 1 and 19.1 to 1, respectively. Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and so are not directly calculable from the above rates. However our statement of operations constant currency results reflect the impact of monthly effects of exchange rates and so are not directly calculable from the above rates. (D) (F) (G) (H)

62

GAAP to Non-GAAP Reconciliation Q4 – U.S. Pawn*

Footnote * - Includes immaterial presentation reclassifications and rounding Footnote (A) Amount excludes $0.2m Net Revenue Impact from Hurricanes Harvey and Irma Footnote (B) Amount excludes Hurricane Store Operating Expenses Impact Footnote (C) Hurricane adjusted EBITDA of $30.3m includes estimated impact of hurricanes of $0.5m and discrete technology/business change related costs of $0.5m

(B) (A) (C)

63

GAAP to Non-GAAP Reconciliation Q4 – Latin America Pawn*

Footnote * - Includes immaterial presentation reclassifications and rounding Footnote (A) Amount excludes Empeño Credit from Restructure of Grupo Notes Receivable * Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in Mexican pesos to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. We used the end-

• f-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The end-of-period

Mexican peso to U.S. dollar exchange rate as of September 30, 2018 and 2017 was 18.7 to 1 and 18.2 to 1, respectively. The approximate average Mexican peso to U.S. dollar exchange rate for years ended September 30, 2018 and 2017 was 19.0 to 1 and 19.1 to 1, respectively. Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and so are not directly calculable from the above rates. However our statement of operations constant currency results reflect the impact of monthly effects of exchange rates and so are not directly calculable from the above rates. The comparable Q4FY18 same store GAAP figures are PLO of 4%, inventory, net of -5%, PSC revenues of 4% and sales & scrap gross profit of 18%. (A)

64

GAAP to Non-GAAP Reconciliation FY – Continuing Operations*

(B) (C) (A) (F) Footnote * - Includes immaterial presentation reclassifications and rounding Footnote (A) Amount excludes $0.1 of acquisition expenses for Empeño Footnote (B) Amount excludes $0.7m of Acquisition Expenses Footnote (C) Amount excludes $11.7m impairment on CCV investment, $5.2m Legal Settlement Credit, $0.1m Asset Disposal and ~$0.2m in FX Gain Footnote (D) Amount excludes tax impact of items listed above and net $4.8m gain from reversal of Fin-48 reserves as well as $4.7m expense from revaluation of DTA as a result of tax reform Footnote (E) Amount excludes Shrink Net Revenue Impact from Hurricanes Harvey and Irma Footnote (F) Amount excludes $0.9m Hurricane Store Operating Expenses Impact Footnote (G) Amount excludes $1.1m in organizational realignment expenses and Acquisition Expenses Footnote (H) Amount excludes $0.4m Gain on FX and $0.2m Loss on Disposal of Assets Footnote (I) Amount excludes 1) $0.5m Empeño Credit and $2.5m Corporate Credit from Restructure of Grupo Notes Receivable, 2) $5.2m expense from debt extinguishment costs reclass from Fortress notes and pay-down of 2019 converts Footnote (J) Amount includes tax impact of items listed above * Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in Mexican pesos to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. We used the end-of-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The end-of- period Mexican peso to U.S. dollar exchange rate as of September 30, 2018 and 2017 was 18.7 to 1 and 18.2 to 1, respectively. The approximate average Mexican peso to U.S. dollar exchange rate for years ended September 30, 2018 and 2017 was 19.0 to 1 and 19.1 to 1, respectively. Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and so are not directly calculable from the above rates. However our statement of operations constant currency results reflect the impact of monthly effects of exchange rates and so are not directly calculable from the above rates. (D) (G) (H) (I) (E) (J)

65

GAAP to Non-GAAP Reconciliation FY – U.S. Pawn*

Footnote * - Includes immaterial presentation reclassifications and rounding Footnote (A) Amount excludes $0.1m of asset write-off for sold stores Footnote (B) Amount excludes Shrink Net Revenue Impact from Hurricanes Harvey and Irma Footnote (C) Amount excludes Hurricane Store Operating Expenses Impact Footnote (D) Hurricane adjusted EBITDA of $125.5m includes estimated impact of hurricanes of $6.9m and discrete technology/business change related costs of $2.5m

(A) (B) (C) (D)

66

GAAP to Non-GAAP Reconciliation FY – Latin America Pawn*

Footnote * - Includes immaterial presentation reclassifications and rounding Footnote (A) Amount excludes $0.1 of acquisition expenses for Empeño Footnote (B) Amount excludes ~$0.1m gain on FX Footnote (C) Amount excludes $0.5m credit from Restructure of Grupo Notes Receivable * Constant currency results reported herein are calculated by translating consolidated balance sheet and consolidated statement of operations items denominated in Mexican pesos to U.S. dollars using the exchange rate from the prior-year comparable period, as opposed to the current period, in order to exclude the effects of foreign currency rate fluctuations. We used the end-

• f-period rate for balance sheet items and the average closing daily exchange rate on a monthly basis during the appropriate period for statement of operations items. The end-of-period

Mexican peso to U.S. dollar exchange rate as of September 30, 2018 and 2017 was 18.7 to 1 and 18.2 to 1, respectively. The approximate average Mexican peso to U.S. dollar exchange rate for years ended September 30, 2018 and 2017 was 19.0 to 1 and 19.1 to 1, respectively. Our statement of operations constant currency results reflect the monthly exchange rate fluctuations and so are not directly calculable from the above rates. However our statement of operations constant currency results reflect the impact of monthly effects of exchange rates and so are not directly calculable from the above rates. (A) (B) (C)

67

Consolidated Growth Reconciliation*

Footnote * - Includes immaterial presentation reclassifications and rounding Mexico Pawn PLO PSA CAGR of 10.8% from 2015 to 2018 on a constant currency basis was 7.5% on a GAAP basis Mexico Pawn EBITDA PSA CAGR of 45% from 2015 to 2018 on a constant currency basis was 32.6% on a GAAP basis Mexico Pawn PLO growth for fiscal 2018 of 10% on a constant currency basis was 7% on a GAAP basis Mexico Pawn acquired PLO growth for fiscal 2018 of 34% on a constant currency basis was 38% on a GAAP basis Mexico Pawn total PLO growth for fiscal 2018 of 44% on a constant currency basis was 31% on a GAAP basis