AXIS AUTO FINANCE OVERVIEW 2021
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AXIS AUTO FINANCE OVERVIEW 2021
HIGHLIGHTS TSX-V: AXIS is a fintech lender extending used vehicle loans
Finance Assets to borrowers with credit scores in the non-prime range
AXIS originates loans indirectly through a coast-to-coast
network of 1,200+ automotive dealers
61% CAGR AXIS loans give our clients much needed access to a vehicle
and support credit rebuilding
Best in the industry management team led by Todd Hudson,
the founder of Element Financial
Axis is the only Canadian lender covering the entire non-
Operating Geography
prime credit spectrum
Loan Book Presence
Corporate Office Significant capital available to fund growth via its $100 MM
senior debt line and securitization facilities
Recently announced a strategic partnership with US giant
Westlake Financial, largest privately-held non-bank
Western
Canada automotive finance company in the U.S.
Quebec
Ontario and
Maritimes
Note: All dollar amounts in CAD, including owned and managed assets | fiscal year end is June 30
2
MANAGEMENT TEAM
Todd Hudson Ilja Troitschanski Richard Lloyd
Chief Executive Officer Founder and President Chief Financial Officer
25 years of sales and operations A successful entrepreneur Former Director of
management experience in with a wealth of business Operations & Finance at
Canadian alternative lending development experience Travelers (acquired by
Scotiabank)
Proven track record of excellence Has built Axis consistently
growing companies organically delivering best portfolio 20 year career in the
and having overseen and metrics in the industry automotive finance industry
integrated 14 acquisitions
Best-in-class management team of industry veterans is leading Axis on to the next stage of growth
3THE MARKET
There are >8,000 auto dealers in Canada
Axis is currently servicing ~1,200
$40 Billion
Canadian Used Car 30%
Market Addressable $8
Consumer Billion
Base Industry
A vehicle is a necessity, with ~30% of Canadians do not Canadian Non-prime used
3 million used cars sold qualify for traditional financing vehicle financing industry
annually in Canada sources
The massive Canadian used car market has realized significant growth over the past decade
4
Source: DesrosiersTHE COMPETITION
A and B credit markets are dominated by the banks
The D credit market is highly fragmented with no dominant players
The opportunity for rapid expansion exists through offering a full non - prime spectrum credit program to dealers
Client Credit
Quality A B C D
LendCare
Lenders
Servicing Market
Segment
AXIS OFFERING OF FULL SPECTRUM B TO D-
CREDIT IS UNIQUE TO THE MARKETPLACE
5OUR CUSTOMERS
Average Customer Demographic
37 years old
Income of ~$3,900/month
Credit score between 450-600
Average Contract
7 years old
Beginning balance of ~$15,600
Monthly payments of ~$450
Average term of 52 months
Canadian Credit Market Average Vehicle Depreciation
~30% of Borrowers
are non-prime
24%
21%
14%
12%
10%
4% 4% 5% 4%
No Score < 549 550 - 599 600 - 649 650 - 699 700 - 749 750 - 799 800 - 849 850 +
6
Source: Equifax, retireby40.comOUR UNDERWRITING TRACK RECORD
• In-house developed predictive risk indicators power better-than-market performance
• Asset Control (GPS) devices utilized to mitigate risk
• Rigorous Credit Policy reviews allow quick changes where necessary
• Newest Fraud Detection tools (Citadel) utilized in underwriting
Delinquencies – Axis vs. Market
2018 2019 2020
Source: Equifax, Company disclosures 7
Note: dates are presented in calendar formatRECESSION SAFE BUSINESS MODEL
• The non-prime market is historically most stable in economic downturns, relative to the prime market
• Key credit statistics from last recession:
– Used car prices declined only 9%
– Sales volumes remained stable
– Delinquency rates of non-prime auto were stable
• Non-prime lenders performed positively throughout the past recession
– Non-prime customers are constantly “cash-flow challenged”
– Tightening standards within prime lenders provides for higher volumes and risk-adjusted returns within non-prime lenders
2009 Recession – Impact on Canadian Market Delinquency Trends (1)
Canadian Used Light Vehicle Sales (C$B) Canadian Unemployment (%) 15.0%
$45 9.0% Subprime
15.2%
$40 8.0%
7.6%
$35 7.0% Near Prime
6.4%
$30 6.0%
4.3%
$25 5.0% Prime
3.8%
$20 4.0%
2.0%
$15 3.0% Prime Plus
1.5%
$10 2.0%
0.9%
Super Prime
$5 1.0% 0.7%
- –
Recession Vintage Pre-Recession Vintage
2005 2006 2007 2008 2009 2010 2011 2012 2013
Non-Prime Credit Segment is historically most stable in Economic Downturns
Source: TransUnion, 2016 U.S. Research Study Titled “Personal Loan Performance During Times of Stress”, equity research, Bloomberg, DesRosiers
(1) 90+ DPD at month 24 8IMPACT OF COVID-19
• Mandated dealership shutdown resulted in a temporarily slow down of originations
• Application volumes are back to pre-COVID levels, pent up demand is expected to drive volumes in
2021 and 2022
• Market demand for used cars accelerated through the pandemic
• 15% of portfolio accounts granted ‘COVID-19 deferral’ – 85%+ have reverted to regular payment
schedules
• $6.25M Government BCAP loan eliminates the need for growth capital
• Management steps to lower SG&A combined with the wage subsidy helped weather the storm
• Operating efficiencies improved significantly through the pandemic
• Technology advancements rolled out over the last 12 months
9AXIS PLATFORM
1 STRONG MARKET PRESENCE
Geographically diversified Coast-to-Coast
The only full spectrum non-prime lender in Canada
2 HIGHLY LEVERAGBLE GROWTH PLATFORM
Size and scale provide operating leverage to grow organically and serve as a portfolio acquisition platform
Lowest cost of capital in the D-credit market
3 SUPERIOR TECHNOLOGY INFRASTRUCTURE
Fully integrated Loan Origination & Management System
Westlake partnership provides access to leading edge adjudication and dealer servicing platform
4 BEST IN CLASS MANAGEMENT TEAM AND BOARD, PERFECTLY ALLIGNED WITH SHAREHOLDERS
Strong management team with decades of experience in the non-prime automotive finance sector
Significant shareholder alignment (insiders own 30%)
10Credit Rehabilitation & Public Perception
100% of Axis loans report to the credit bureau
• Axis is an effective stepping stone to credit recovery
(1)
>71% of Axis customers improve their credit rating through an Axis loan
• Automobile installment loans act as a highly effective method to improve one’s credit rating
Industry leading brand reception across numerous metrics
A+ 4.6 / 5.0 4.9 / 5.0
(Top Ranked vs Peers)
Source: Axis, Equifax Database 11
(1) Pays (or paid) within 30 days of due date or not over one payment past dueBOARD OF DIRECTORS
Paul Stoyan • Chairman of Gardiner Roberts LLP, a Canadian business law firm
Chairman • Director at ECN Capital and Enghouse Systems; former Director at Open Text Corporation
Todd Hudson
• CEO of Axis
Director
Ilja Troitschanski
• Founder and President of Axis
Director
Bruce Smith • Former President and Chief Operating Officer of Element Financial Corporation (TSX: EFN) and former
Director Managing Director and Senior Vice President of Vendor Finance at CIT Financial
Gerry Thom • 35 years of experience in operations and management in the public and private sectors
Director • Recently retired as President of the Public Services Commission
Wes Neichenbauer • VP and CFO at Rowntree Enterprises
Director • Decades of experience in automotive retail and financing with Applewood and Trend Financial
Lesley Gallinger • President and CEO of Elexicon Energy
Director • Former Chief Strategy and Financial Officer for the Electrical Safety Authority
12CAPITAL STRUCTURE
May 31, 2021
Capitalization Equity Ownership
Share Price (as of May. 31, 2021) $0.31
Axis Insider Holdings 29.4
Institutional Holdings 30.0
39% 30%
Retail Holdings 37.8 Retail Holdings Axis Insider
Holdings
Basic Shares Outstanding 97.2
Market Cap $30
31%
Institutional
Holdings
Metrics
Axis Adj. P/E multiple* 5.02x
Capitalization Equity Ownership
*Q3 F2021 annualized 13
Source: All dollar amounts in C$MM, equity ownership percentages based on management assumptions.AXIS AUTO FINANCE
Ilja Troitschanski
Founder & President
Phone: (416) 633-5626
Email: ir@axisautofinance.com
14Disclaimer
This presentation (the “presentation”) has been prepared by Axis Auto Finance Inc. (the “Corporation”) and is being delivered for
information purposes only. The presentation is confidential and is made available strictly on the basis that it will not be reproduced,
redistributed or disclosed, in whole or in part, to any other person at any time, nor its contents disclosed or used for any purpose, without
the prior written consent of the Corporation. The presentation does not contain all information that a prospective investor may require. It is
an overview only and does not contain all the information necessary for investment decisions. Unless otherwise specified in the
presentation, information contained in the presentation may not always be current. No reliance may be placed for any purpose
whatsoever on the information contained in the presentation or on its completeness, and no liability whatsoever is accepted for any loss
howsoever arising from any use of the presentation or its contents or otherwise in connection therewith.
This presentation contains information provided to the Corporation by other parties. The Corporation has investigated such information
but has not completed due diligence and cannot represent and warrant that such information is completely accurate. Should a transaction
progress actual results should be expected to vary from the information presented here. This presentation contains material, non-public
information and you have agreed to hold such information (including the fact that a transaction is being considered) and any additional
non-public information included herein in strict confidence and not to use any material, non-public information in contravention of
applicable securities laws. You are strictly prohibited from disclosing or using this information, other than for the purpose of considering
the referenced transaction, until the information is publicly announced or you receive notice that the referenced transaction has been
abandoned. This prohibition includes any trading in the securities of the Corporation, or any security which derives its value from the
securities of the Corporation. This presentation also provides information on a comparison case study. Readers should be cautioned that
this case study has been provided for illustrative purposes only and should not be interpreted as the projected outcome of the
Corporation.
Neither the presentation nor any copy of it may be taken or transmitted except in compliance with the applicable securities laws. By
accepting this presentation, the recipient represents and warrants that it is a person to whom the presentation may be delivered or
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as offering material of any sort. The presentation and the information do not constitute an offer of securities for sale in the United States.
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