Stefan Kempf, founder and CEO why we do what we do Mission 4 Mio. - PDF document

Stefan Kempf, founder and CEO

why we do what we do Mission 4 Mio. Freelancer und Kleinstunternehmer _________ möchten sich auf ihre Tätigkeit fokussieren. We want to enable entrepreneurs to focus Keiner kann sich einen CFO leisten und muss on their business and be more successful sich daher selbst um seine Finanzen kümmern. by supporting with fast, smooth and Es gibt aktuell keine digitale Lösung, die intelligent financial solutions. Unternehmer dabei intelligent unterstützt. 2

where we come from Milestones Transaction Volume in EUR m 350 2012: founded by S.Kempf / M.Bommer 300 initially factoring for SME 2014: launch of Rechnung48 250 2015: initiating Finetrading 200 2015: entering leasing market 2016: adding Debt Collection Service 150 2017: launch of amacash 100 2018: stock listing m:access 2019: rebranding from Elbe to aifinyo 50 2020: merger Decimo 0 2012 2013 2014 2015 2016 2017 2018 2019 aifinyo Decimo 3

market opportunity driven by megatrends 4 m Freelancer/SME prefer to focus on business rather than finance, but can’t afford a CFO 4

connecting financial needs by technology existing Partly existing / we are working on it future Key to success will be beyond backend digitalisation to actively navigate our customers through their daily business activities by various integrated tools. 5

revenue potential commercial retail clients 4 m unattended EUR 8 bn SME - commercial and corporate retail revenue potential clients 1 m target clients of banks 6

digital & integration – key to success Technology enables smooth processes in real-time Integration creates new possibilities to support customers and increase loyalty Perfect circumstances for smart financing solutions In the short term, financing in commercial retail business will be dominated by few players. These players will have an unfair advantage due to cost efficient, highly selective, smooth and instant credit decision processes based on a huge pool of customer data. 7

well positioned in a consolidating market  currently high pressure on market multiple- banks consolidation product- saving banks provider (~1.700)  aifinyo is well positioned, due to product range, size alternative and tech focus 1-product fintechs financing provider (~800) (~1.000)  first move through merger with Decimo low tech tech challenger  highly fragmented market, huge number of competitors  banks lack technology and focus, regulatory burden  alternative financing competitors lack product range and small ticket expertise  fintechs are mainly to small for platform cost and lack product range 8

deal rational merger with Decimo perfect fit because... merger objectives… leading tech platform for tech focus B2B retail financing platform same target customers maximise synergies same product strengthen market position add value to customers complimentary team (cross & up-selling) 9

value creation aifinyo creates value (interest / service fee margin of 15%) by matching the needs of its clients with the funding market. clients funding freelancer, start-ups, SME (banks) Ø funding cost ~2% Slow decision processes Need small amounts Ø return ~17%* Prefer big companies due to Fast money preferred due to rating lack of planning Focus on big tickets due to high Used to instant response from processing cost per ticket retail market Open minded for digital Low level of digitalization solutions aifinyo credit decision and processing platform credit engine with ability cost efficient for fast due to digital risk transformation integration to rate small tickets small tickets *as of 31.12.2019 incl. Decimo GmbH 10

customer segments by adj. revenue* by number of clients Finetrading Leasing Leasing Debt Debt 4% 1% 13% Collection/other Collection/other Factoring 1% 1% (Freelancer) Factoring 28% (SME) 9% Finetrading 16% Factoring Factoring (SME) (Freelancer) 42% 85%  Based on adj. revenues* Factoring for SME, Freelancer  Based on number of clients, most of them are in and Finetrading are most relevant business units Factoring Freelancer Segment (85%) followed by SME Factoring (9%) and Finetrading (4%)  Distribution of revenues gets more equal weighted since  On average ~1.5K active clients per month with regard to units other than Factoring (SME) grow faster a new financing and ~4K clients with a running financing *net of cost for purchased goods and depreciation for leased assets related to customer lending business 11

focus on short term maturities average remaining portfolio lifetime in month short portfolio duration - 10 20 30 40  aifinyo’ s portfolio consists largely of short term maturities  Portfolio is dominated by trade receivables (factoring) trade receivables with average remaining lifetime of ~ 1 month (initial 0,83 (54% of portfolio) lifetime on average 42 days)  About 80% of the portfolio with average remaining lifetime of below 2 month  Essentially no interest rate risk trade finance 1,60 (25% of portfolio) due to short term portfolio duration lease receivables 32,40 aifinyo is able to quickly adopt (21% of portfolio) to changing market environment 12

covid-19 – short term impacts and actions short term impacts action undertaken Target customers had less turnover Reduction of exposure in critical industries Less need for working capital financing Increase in credit standards / collateral Few investments by (cautious) clients Focus on short term maturities Huge competition by state banks (KFW) Price adjustments due to higher risk Higher default rates Active decrease of credit / risk portfolio 13

covid-19 – short term rise in risk aifinyo has a rigorous risk management with long term experience. aifinyo applies digital / algorithm based models as well as expert systems. 100% expenses for risk  Risk costs historically fluctuated due to lower 59,8% diversification in early ears and increased mainly because auf finetrading and freelancer factoring, with higher provisions for expected defaults. Merger with Decimo will also lead to higher risk cost (by higher fees) 13,77%  Risk cost are a historical minor part of adj. revenues (~ 10% 5%) 6,35% 4,9%  Due to corona crisis, and short term lending structure, defaults significantly increased in 1 st hy 2020 (€ 2.4 m in 1 st hy 2020 vs. 0.4m in 2019) 0,99% 1%  Most of the unexpected risk occurred in tourism sector. 0,68% We significantly reduced industry exposure here as well covid-19 estimate as in other corona affected industries  Risk expenses are considered in the P&L in line 6. other operating expenses and line 9. depreciation of current assets 0% 2015 2016 2017 2018 2019 1st hy 1st hy 20  Since we very quickly adjusted our credit process, we 2020 est assume significantly lower risk costs in 2 nd hy 2020 % of adj. Revenues % of total assets % of revenues 14

1 st hy 20 financial figures (incl. Decimo) transaction volume adj. revenues* turnover EBT in EUR m in EUR m in EUR m in EUR m 1. hy 2019 1. hy 2020 4,2 3,8 153 -0,4 21 142 17 -2,6 1. hy 2019 1. hy 2020 1. hy 2019 1. hy 2020 1. hy 2019 1. hy 2020  Due to corona less  Loss in revenues mainly  Due to pricing adjustments  EBT suffered especially transaction volume due to Q2 because of and product mix change, due to unexpected losses especially in Q2 fewer business in loss in adj. revenues was and one time integration finetrading and leasing below loss in turnover cost of Decimo  Downturn stopped end of  Despite first effects in  R&D expenses are not Q2/20 July 20 7% above Feb./Mar. Q1/20 was still activated and expensed June 20 10% above Q1/19 *net of cost for purchased goods and depreciation for leased assets related to customer lending business 15

key (annual) financial figures (incl. Decimo) transaction volume adj. revenues* turnover EBT in EUR m in EUR m in EUR m in EUR m 320 44 8,7 248 +35% 6,8 44 29 185 2017 2018 2019 -208 4,8 14 -917 2017 2018 2019 2017 2018 2019 2017 2018 2019 aifinyo Decimo total aifinyo Decimo total aifinyo Decimo total aifinyo Decimo total  Strong growth in  Strong growth as well in  Adj. revenues is most  Despite high IT/R&D transaction (financing) turnover important internal financial spending's aifinyo was volume KPI always profitable  Dominated by finetrading  Dominated by factoring,  Revenues are adjusted for  Merger with Decimo will (gross accounted for in followed by finetrading and turnover, vs. e.g. factoring cost for purchased goods lead to synergies leasing only accounts for the fee) and leasing depreciation increasing EBT *net of cost for purchased goods and depreciation for leased assets related to customer lending business 16