4finance Investor Presentation December 2017
Disclaimer While all reasonable care has been taken to ensure that the facts stated herein are accurate and that the forecasts, opinions and expectations contained herein, are fair and reasonable, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information, or opinions contained herein. Neither 4finance nor any of 4finance`s advisors or representatives shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. This presentation is based on the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent developments may affect the information contained in this document, which neither 4finance nor its advisors are under an obligation to update, revise or affirm. The distribution of this presentation in certain jurisdictions may be restricted by law. Persons into whose possession this presentation comes are required to inform themselves about and to observe any such restrictions. The following information contains, or may be deemed to contain, “forward -looking statements” . These statements relate to future events or our future financial performance, including, but not limited to, strategic plans, potential growth, planned operational changes, expected capital expenditures, future cash sources and requirements, liquidity and cost savings that involve known and unknown risks, uncertainties and other factors that may cause 4 finance’s or its businesses’ actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. In some cases, such forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of those terms or other comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Future results may vary from the results expressed in, or implied by, the following forward-looking statements, possibly to a material degree. All forward-looking statements made in this presentation are based on information presently available to management and 4finance assumes no obligation to update any forward-looking statements. 2
Topics • The Market Opportunity • The Business Today • Our Areas of Focus • Driving near term performance • Rapidly laying a foundation for the future • Financial Summary • Conclusion 3
The opportunity for 4finance is significant • There are c.2.6 billion financially underserved across the world, including a large ‘aspirational near - prime’ segment of c.500 m illion that remains hard to credit score/serve, but represents a promising opportunity for 4finance, in line with our core skill-sets • This aspirational near-prime group is made up of to two main communities: • Millennial generation , still possessing limited credit histories, that is changing fundamental expectations around how financial products are designed and served, breaking old conventions • Fast growing, aspirational and increasingly affluent middle class in emerging markets , exhibiting strong demand for financial products and services they have historically not been able to access • Breakthroughs in data science, analytics, low cost cloud computing and artificial intelligence are unlocking the ability to credit score and serve these historically underserved • Ubiquitous/inexpensive mobile internet access allows the delivery of sophisticated mobile financial products anytime and anywhere • With our size, scope, expertise and financial strength, 4finance is uniquely poised to take advantage of this opportunity 4
Why 4finance is uniquely positioned • Unique scale and expertise • Well capitalised, disciplined and profitable Unique scale Multi-product multi- Well capitalized, • Convenient, simple & transparent products with a mobile-first and expertise region experience profitable, focus, and a growing expertise in serving millennials financially disciplined • Deep expertise in scoring customers with limited or no credit history • Increasingly diverse product suite capable of helping customers mitigate short term cash flow needs, fund longer term and more Simple, Mobile Deep scoring aspirational purchases and save for the future transparent friendly expertise products • Automation and self service capabilities that allow us to offer small ticket sizes efficiently and economically • Access to a network of strategic partnerships and/or acquisitions that can enable us to offer new products, new capabilities, new channels Increasingly Automation and self Access to diversified service capabilities strategic product suite partnerships 5
Track record of profitable growth € 5,000,000,000+ 33,000,000+ 8,800,000+ Registered customers (1) Loans issued Online applications reviewed >3,500 84% 5 16 Main lending Countries 9M 2017 9M 2017 returning full time customer business (2) products, with of operation EU licensed bank employees Profit before tax Interest income € m € m 81 74 393 63 327 60 318 287 53 49 220 149 2013 2014 2015 2016 9M'2016 9M'2017 2013 2014 2015 2016 9M'2016 9M'2017 Notes: 6 (1) Includes 1.4 million registered TBI Bank customers See appendix for definitions of key metrics and ratios (2) Issuance volumes to customers who have returned, ie taken out and repaid at least one prior loan
The Business Today 7
Clear and simple product range Deposit products Consumer lending products Single Line of Credit Instalment Bank Non-bank Point of Sale Payment loan / Credit Card loan 94% 6% % of net 41% 2% 39% 10% receivables (1) € 100k guarantee limit € 5,250 limit €350 € 1,200 € 850 € 500 Typical amount Typically 3 – 36 months Up to 1 – 5 years Term Current accounts and term Current and term deposits Up to 30 - 65 days Open-ended revolving deposits (6 months av. term) (up to 3 years) depending on market credit line depending on market depending on market Payment type Single payment Minimum monthly Repayment in fixed monthly Repayment in fixed Annual or at maturity Annual or at maturity encompassing the principal repayment & flexible instalments with amortising monthly instalments repayment and loan fee additional repayment principal Pricing Monthly interest rates: Monthly interest rates: Annual interest rates: Annual interest rates: Annual rate: 0.5% - 2.6% Annual rate: 6.5% - 10% 5% - 33% in Europe c.3% (credit cards) 35% - 60% in LT, BG, RO c.30% in Spain 30% – 50% in BG, RO 30% - 40% in LatAm 8.5% - 10% (online LOC) 60% - 100% in others Extension Option to extend up to 30 Flexible payment options Option to delay the monthly n/a n/a n/a days (payable up front) as long as minimum instalment by one month Minimum-to-pay format in monthly payment is met some markets Markets Bulgaria, Romania Sweden All 16 markets Bulgaria, Romania, 10 markets Bulgaria, Romania, Spain Finland, Latvia Note: (1) Net receivables as of 30/9/2017. Remaining 8% of net loan portfolio is SME lending within TBI Bank 8
Diversification by product and geography 9M17 Net receivables: € 556m 9M17 interest income: € 327m 62% online / 38% banking Other Argentina Bank (SME) Latvia 2% 2% Romania 8% 8% Lithuania 7% 2% Point of Sale Finland 10% 5% Bulgaria 8% Sweden Single Payment 5% Loans Czech Republic 41% 5% Poland Spain 25% 18% Instalment loans 39% Line of Credit / Cards Denmark Georgia 2% 9% 4% 9
Online customer profile Trust Pilot and eKomi (1) score by countries Most common customer characteristics: 9.7 9.6 • Has at least one bank account • Underserved by traditional banks 9.4 9.2 9.2 9.1 8.8 • Expenditure matches monthly • Uses financing for lifestyle choices income or necessities 1 loan • Little or no savings • Seeking transparency, speed and 4 and more loans efficiency. • Limited credit history • Loyal - 84% of loans are issued to 3 loans 2 loans vivus.pl vivus.dk vivus.fi vivus.se zaplo.pl zaplo.dk vivus.es • Employed, self employed or retired returning customers (9M ’2017) Note: (1) Trust Pilot score in Poland, Denmark, Finland, Sweden; eKomi score in Spain (scores out of 10) Client split by age (9M’2017) Applications by source 35% 31.4% 4.8% 30% 7.0% 25% Desktop 22.8% 23.4% 20% 42.7% 17.1% Mobile 15% 12.4% 9.8% 50.3% 71.8% Other 10% 5.9% 5% 0.7% 0% 9M’2017 18-20 21-24 25-29 30-39 40-49 50-59 60+ 2015 10
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