Investor Presentation Financial Results 30 June 2013 FY2013 - PowerPoint PPT Presentation

Investor Presentation Financial Results 30 June 2013

FY2013 Highlights  Record Result  Revenue up 16% to $272.7m, EBITDA up 19% to $57m  Driven by increasing personal loan income  NPAT $32.9m, up 11.7%. Strong result despite impact of costs associated with new legislation, UK collection rates and Ausgroup exit bonus provision  Final dividend 2cps (FY13 dividend up 14% to 4cps, fully franked)  Strong growth in loan books  Aust. loan book up 35% on FY12 to $91.5m, EBITDA $40.7m  UK loan book to £20.3m up 60% on FY12 Total Value of Personal Loan Books (as at 30 June 2013)  Record online loan advances in Australia, up 89% to $26.9m  Aust. loan book bad debt levels are stable  Positive Outlook for FY14  Continued growth in loan books  Expect continued strong growth from online loan products  Systems in place and running to handle new regulatory regime Page 2  Improving UK collection rates

Corporate Snapshot Experienced Board of Directors and Strong Management Team Board of Directors Senior Management Reginald Webb (Non Executive Chairman) Peter Cumins (Managing Director) Former partner of PricewaterhouseCoopers. Director since 1997 Joined in 1990 Peter Cumins (Managing Director) Ralph Groom (Chief Financial Officer & Company Secretary) Joined in 1990, Board member since 1995. Qualified accountant Joined in 1995 John Yeudall (Non Executive Director) Michael Cooke (Group Legal Counsel) Previous Aust. Trade Commissioner and Consul General. Director since 2001 Joined in 1993 William Love (Non Executive Director) Ian Day (General Manager, Australia) Former partner of KPMG. Director since 2009. Board member of EZCORP Joined in 1992 Joseph Beal (Non Executive Director) David Patrick (Chief Executive Officer, UK) Director since 2009. Board member of EZCORP Joined in 2009 Page 3 Mike Osborne (Chief Financial Officer & Company Secretary UK) Joined in 2010

Personal Finance Products Personal Loans Australian Personal Loan Book  Safrock. Unsecured, instalment loans  Fees comprise of establishment fee and interest  Divisional EBITDA of $42.5m (up 25.4% on FY12)  Australia: June 2013 value of book $91.5m (up 35% on FY12)  UK: June 2013 value of book £20.3m (up 60% on FY12)  Online lending growing rapidly  Aust. 16,471 loans totaling $26.9m, up 89% on FY12  UK. 3,990 loans made, totaling $2.8m, up 195% on FY12 UK Personal Loan Book  Bad Debts:  Australian bad debts written off reduced to 5.3% (FY12 5.6%)  EBITDA from UK loan book $1.8m (down 58% on FY12), provision increased to £10.2m (HY13 £5.2m)  UK collection issues on aging loans & customers still establishing credit profile  UK experience has been similar to the Australian start up  Implemented controls to reduce UK bad debt ratio, signs of improvement in June and July 2013 Page 4 LHS. Loan Book RHS. Bad debts as % of principal loaned

Personal Finance Products Cash Advance Administration  Unsecured, short term loan, small amounts  Mon-E provides the admin services to the network  Loan is provided by the franchisee to the client with Cash Converters receiving administration fees  Aust. cash advance loans: $235.7m, 464,857 customers  UK cash advance loans: £38.2m, 117,737 customers  Average loan:  $341 Australia for 1 month  £134 UK for 1 month  New online cash advance product, $1.5m lent in FY13  Divisional EBITDA $14.4m (up 4.8% on FY12)  Profit margin impacted by new Consumer Credit Legislation, 1 Mar 2013  Increased administration reduced volumes  Time for staff and customers to absorb changes  Additional compliance costs had one-off $2.3m EBITDA impact  Volumes are improving, June outgoings back to within 15% of average monthly outgoings Page 5

Store Network Well Established, Global Presence, Diversified Offering Modern Stores with Broad Service Offering:  Sale of 2nd hand goods: owned stores, franchises and Webshop  Cash advance loans and Personal loans  Pawn broking and Buy backs  Motor vehicle offering (Carboodle) Global Network of Cash Converters Stores  717 store network built up through franchising since 1988  Store network provides retail product sales, distribution of financial services products and point of contact for our large customer base Corporate Store Strategy  Building the corporate store network, 118 stores (UK:63, Aust: 55)  Corporate stores have been acquired at accretive multiples  Store management team and systems in place to manage in growth Significant Competitive Advantages  Long operating history, depth of management experience and knowledge  Well established systems and procedures, modern retailing practices  High ethical standards and practices FY 2013  Corporate store revenues increased by $13.2m  Overall Australian store EBITDA up 2.5% to $8.8m despite impact of $965k profit drag from 3 new greenfield stores and $1.2m of one-off revenue losses and compliance costs relating to additional responsible lending obligations Page 6  UK stores experiencing weak trading conditions

Regulatory Environment Cash Converters has significant experience operating in a number of regulatory regimes Australia – Regulatory Environment  Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 passed by the House of Representatives and the Senate. Provisions effective from 1 July 2013  In summary, the provisions apply to all the micro lending engaged in by Cash Converters:  Definition of small amount credit contracts: Term of at least 16 days. Not exceeding 1 year . Amount not exceeding $2,000  Fees and charges: An establishment fee capped at 20% of loan amount. A monthly fee of 4% can be charged  A 200% total cap on what can be recovered from a borrower  For Centrelink dependent consumers the amount of loan repayments is capped at 20% of their income  A place in the economy . The Minister, Bill Shorten, is quoted as saying "This Government believes there is a place in the economy for legitimate short term small amount lending. These loans are appropriate to fill in the gaps for people who need a temporary cash injection”  Certainty . Providing regulatory certainty for planning investment to deliver on our growth strategies  Competitive advantage for CCV . This legislation should provide CCV with a competitive advantage in our markets as certain smaller providers who do not have adequate systems and standards in place move out of the industry United Kingdom – Regulatory Environment  OFT completed a review of CCUK pay day loan product and found minimal compliance issues which have since been rectified Page 7

Legislative Reforms For Small Amount Credit Contracts (SACC) 1 March 2013 – First tranche of credit reforms rolled out Changes in brief More than 2 X SACC’s in a 90 -day period presumed unsuitable (2 + triggers a rebuttal process). This is includes loans from other SAAC lenders 20% Protected Earnings Amount for Centrelink welfare or benefits recipients SACC presumed unsuitable where consumer is in default of another SACC All SACC applicants must provide latest 90 days of bank statements for consideration New hardship provisions New Warnings to be displayed at lending premises, on websites etc Page 8

Carboodle  Carboodle was established as Green Light Auto Group Pty Ltd (“GLA”) in 2010  Total motoring solution providing customers who don’t have access to main stream credit (retail and commercial) with a reliable and well maintained car  Carboodle is a licensed motor vehicle dealer  Offers a range of late model vehicles to its customers  Four year lease term inclusive of running costs (insurance, maintenance, registration, roadside assistance etc) for a weekly payment  Carboodle has an exclusive Licence with Cash Converters that allows it to use the Australian stores as its agent to promote its product. Carboodle pays a royalty to the Company and a commission to stores  Cash Converters has loaned $18m to Green Light Auto and provided management assistance when needed. $40m funding facility provided by Fortress covers 80% of vehicle purchase price  Cash Converters has a right to covert its loan to 80% equity effective from 1 July 2013. Also an option to acquire 20% balance from Feb 2015. GLA will be consolidated into the CCV accounts from 1 July 2013  Carboodle now has showroom centres in Perth, Melbourne, Brisbane and Sydney. Adelaide showroom due to open later in the year  Carboodle has 528 active leases with forward contracted lease payments of Page 9 $21m. Total revenue for FY 2013 of $5m