IDF Spain - Investor Presentation - November 2020 - Mintos
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IDF Spain – Investor Presentation
November 2020
Top 2 fastest- The most Top 50 fastest- Europe’s 100 The most Top-250 fintech Innovation
growing fintech in innovative financial growing private Hottest Startups innovative in credit companies leader
Europe service for 2020 European companies scoring services
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2
Agenda
page
1 IDF SPAIN OVERVIEW 4
2 LEADING ALTERNATIVE FINANCE BRAND 8
3 FINANCIAL PERFORMANCE 15
4 APPENDICES: 21
1. Management team
2. Group structure
3. Financial statements
3
Section 1
IDF Spain overview
4
IDF Spain is a part of the leading international fintech group
One of the fastest growing EUR 390m +
International FinTech group Loans issued
Revenue, EUR m
4.8m + 400+ 81
Users Professionals 76
41
EUR 76m + EUR 123m +
Revenue for 9M 2020 Issuance for 9M 2020 13
2017 2018 2019 9M 2020
EUROPE LATAM
▪ Focused on consumer lending in Spain and Latin America
Operating income, EUR m
▪ Artificial Intelligence is core of the business - team professionals
globally use proprietary state-of-the-art AI and Data Science
7.4
technologies
5.5
1.0
▪ Robust data science and credit scoring capabilities built on
proprietary State-of-the-Art IT Platform -1.1
2017 2018 2019 9M 2020
5
IDF Spain showed fast growth since 2015 and became the leading player in Spain
2019-2020
▪ Record-breaking EUR5.5m equity
crowdfunding round in 2019 in Spain
at EUR 95m post-money valuation
▪ ID Finance named the leading
2017-2018 alternative lending brand in Spain
▪ Insurance product was launched
▪ The second fastest growing fintech
in the region by Financial Times ▪ Surpassed 1 million registered users
▪ In 2018, achieved positive net ▪ Top 10 Barcelona tech-companies
income ▪ Issued bonds in amount of EUR40m
2015-2016 ▪ Local funding raised on Frankfurt Stock Exchange
▪ Awarded by reputable media: Wired,
▪ In 2015 launched operations in Financial Times 257
Spain
▪ Product-market fit reached
▪ Positive unit economics achieved 170
70
26
1 7
2015 2016 2017 2018 2019 9M 2020
Loans issued, cumulative, EURm
6
IDF Spain in brief
Key financial highlights
Fastest growing
EUR m 9M 2020 2019 2018
fintech company in Spain
Key metrics
Revenue 47.5 48.5 23.0
Net Income 3.4 3.3 0.1
Leading brand
Total assets 43.9 33.0 14.8
among alternative lenders by number of
Loans and borrowings 31.2 23.4 12.7
brand search
Equity 8.8 5.4 -0.9
Key ratios
ROAE 64.3% 143.9% -
Well capitalized ROAA 11.9% 13.7% 0.7%
20.1% equity-to-assets ratio Net income margin 7.2% 6.7% 0.3%
Equity ratio 20.1% 16.4% -
Registered users, m
+47% YoY
Revenue growth (9M 2020) 1.5m+
Registered users (9M 2020)
1.5
1.3
1.1
+92% YoY 0.8
Net income growth (9M 2020) 0.6
0.4
0.3
Jan-18 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Sep-20
7
Section 2
Leading alternative finance brand
8
Attractive product proposition
▪ Leading alternative lending brand according to brand search statistics
▪ Fully automated lending service operating online 24/7
▪ Fast and convenient financial services via web and mobile platforms
▪ Focus on solving short-term cash flow needs of our customer
▪ Customized product for clients who use alternative financial services
▪ Industry-beating NPS of 68, which is higher than the NPS of traditional
banks (32 on average for the banks)
Loan amount: Term:
Up to EUR1,300 Up to 4 months
9
Deep understanding of target customers
Sex Marital status
20 - 45 years old
1.8%
6.7%
Single
10.5%
1
36.9% Married
Male
Demand convenience Divorced
Female 56.9%
63.1% 24.1%
Widowed
2
Other
EUR 1-1.5k disposable
income
Employment Age
Full-time
9% 16.6%
Part-time 17.4% 18-25
Tech-savvy 9%
4% Temporary work 26-30
Self-employed 14.4% 31-40
8% 22.6%
56%
General employee 41-50
10%
4% Pensioner 51+
Loan users / clients 29.0%
without credit history Other
* Data of customers to whom the loan was granted in 1H 2020
1 – including civil marriage; 2 – including clients who left the question blank 10Efficient customer acquisition and retention
Acquisition Channels Structure
Marketing strategy
(% of new loans issued)
5%
▪ Omni-channel marketing provides seamless customer 5%
experience across all channels, across multiple touch points CPA
7%
PPC
▪ Well-diversified strategy of online marketing
▪ CPA (Cost-per-action) - global relationship with key affiliates Organic
51%
▪ PPC (Pay-per-click) - continuous optimization of acquisition 32% Direct Marketing
costs via Google and Facebook
Mobile
▪ Organic - key acquisition channel which provides the most
loyal clients with the lowest CAC. Moneyman is now one of the
most popular finance brands
▪ Direct Marketing - the most important channel to generate Loyal customer base with high retention rate
repeat business. Continuous “dialogue” with clients and
propensity scoring insures high CLV 68
80%
▪ Mobile marketing – mobile app driven marketing increases Net Promoting Score
Recurring clients
retention rate (NPS) above peers
▪ Dedicated team per each marketing channel 68
17 32 62
▪ Clear KPIs for marketing split, cost and retention
Low Average High
Source: delighted.com/nps-benchmarks
11Fully online underwriting process
Application Client identification (KYC) Credit policy & Antifraud Loan disbursement
▪ Product selection ▪ Name check vs. internal and ▪ Behaviour stats and external databases (incl. ▪ Disbursement to the
external DBs AntiFraud, Sanctions & Terrorist lists) bank account
▪ Basic customer information:
▪ Client ID ▪ Categorisation of clients into several groups
– personal data
▪ Bank Account validation ▪ Several score models
– employment
– bank account information
2-3 min
from application to disbursement
Higher approval rates for customers with proven credit history with the Company
New clients 22%
Recurring
clients 74%
12Established automated collection process
Pre- Outsourced Debt Legal
In-house collections Debt–Sales
collection Collections Agencies Collections
Due date Due date 60 DPD’s 180+ days
-5 delay
Reminders are sent: ▪ Automatic SMS/email/ ▪ Competitive tender process for Highly automated and New process being
robo-caller reminders; outsource debt collection efficient legal collection introduced and
▪ Automatic
SMS/email ▪ Reaching clients using all ▪ For the next 16 weeks agencies process implemented:
reminders available contact info contact centres try to recover the ▪ Competitive tenders
debts; will be run to sell
▪ Pre-collection ▪ Automated Direct debit
calls for risky process in place till 60 ▪ Incentive program tailored to NPL portfolios
client segment DPD’s stimulate agency performance and
competition
84%+ of all cash collected is done
in-house within the first 60 DPD’s
13Core of Our Business – Artificial Intelligence (AI)
IDF Technology: IT team IDF Lab: Risk and Data analytics team
186 Chief Technical Officer 39 Chief Risk Officer
people people
employed employed
Quality assurance
Portfolio management
Developers
Business Analysts Data science
Security
System Administration Financial modelling
AI expertise
14Section 3
Financial performance
15Solid growth and superior risk-adjusted margins
Strong revenue growth (EUR m) Loan issuance (EUR m)
+111% +47% +129% +24%
48.5 47.5
100.4
87.1
32.3 70.2
23.0
43.9
2018 2019 9M 2019 9M 2020 2018 2019 9М 2019 9М 2020
Best-in class risk-adjusted NIM... (%) …well above the peers
Risk-adjusted NIM1, %
91.5% 92.6% 93.3% 93.3%
75.0%
23.5% 23.5% 20.3%
12.4%
2018 2019 9М 2020
1– IDF Spain data as of 9М 2020, for other companies – as of 1H 2020. Risk-adjusted NIM is defined as net interest margin after provisions,
divided by the portfolio 16Strong operating efficiency and profitability
High operating margin Leading Cost / Income ratio1
34.2%
70.5%
25.3% 25.9% 26.6% 63.8%
59.6%
11.7 12.1 51.5%
47.5%
2.6 2.5
7.5 8.0
1.2 1.7
9.0 9.6 26.6%
6.3 6.3
2018 2019 9M 2019 9M 2020
Administrative expenses, EUR m
Marketing and issue expenses, EUR m
Cost / Income, %
Robust profitability Maintained profitability during the crisis
ROAE Net profit margin1, %
143.9% 64.3% 12.6%
7.2%
3.3 3.4
1.8 -1.9%
-5.3%
-8.9%
0.1
-15.1%
2018 2019 9M 2019 9M 2020
Net income, EUR m xx ROAE, %
1 – IDF Spain data as of 9M 2020, for other companies – as of 1H 2020
17Healthy asset quality and conservative provisioning
NPL ratios (Stage 3 / Gross loans, %)1
43.7%
▪ Stable asset quality metrics and conservative
38.6%
provisioning
28.4%
▪ To address economic turmoil amid COVID-19
outbreak IDF Spain instantly adopted
precautious measures:
2018 2019 9M 2020
− Tighten credit policy and loan underwriting
NPL coverage (%)
− Decreased approval rates
149.0% − Enhanced portfolio monitoring
127.5% 120.9%
▪ These allowed the Company to maintain
portfolio quality and decrease NPLs in
9M 2020 even lower than expected
2018 2019 9M 2020
1 – includes loans with 90+ days delay
18Strong liquidity profile and capital position
Equity / Assets Cash and Cash equivalents / Assets
13.9%
20.1%
11.0%
16.4%
8.4%
min. requirement 5%
n/a
2018 2019 9M 2020
2018 2019 9M 2020
Strong capital adequacy vs. peers Highest interest coverage vs. peers
Equity / Assets1, % EBIT / Interest expenses1, %
33.0%
3.2
20.0% 2.7
17.0% 16.0%
12.0%
8.0% 0.9 0.9
0.6
-0.7
1 – IDF Spain data as of 9M 2020, for other companies – as of 1H 2020
19Resilient performance amid COVID-19 outbreak
1 Resilient performance 2 Asset quality intact
9M 2020 financial results ✓ Tighter credit policy during the COVID-19
outbreak and respective lockdown
EUR 47.5m 47% YoY 27%
Revenue Revenue growth Cost / Income ✓ No deteriorations signs in the portfolio seen
through the crisis
EUR 3.4m
93%
64% ✓ No impact of loan moratorium measures
Risk-adjusted
Net Income ROAE
NIM ✓ NPLs are lower than expected and continue to
improve
3 Strengthened capital adequacy and funding profile
Debt / Equity Equity / Total Assets Share of long-term debt
4.3x
3.5x 20% 58%
16%
29%
Dec-19 Sep-20 Dec-19 Sep-20 Dec-19 Sep-20
20APPENDICES
21Appendix 1. Highly qualified global management team
Boris Batin, PhD Alexander Dunaev, CFA
Co-founder, CEO Co-founder, COO
15+ years of experience 10+ years of experience
Finance Risk management Marketing Legal
Javier Lopez Tim Kostin Alessandro Ceschel Jose Manuel Novo
Chief Financial Officer (CFO) Chief Risk Officer (CRO) Chief Marketing Officer (CMO) Global Head of Legal and
Compliance
20+ years of experience 12+ years of experience 11+ years of experience 11+ years of experience
22Appendix 1. Dedicated team of local professionals
Management Operations Finance Legal Marketing
Carlos Lopez Marco Silva Alex Calvo Helena Fuentes Carlos Martin
Country manager Chief Operating Officer CFO IDF Spain Head of Legal & Marketing Director IDF
IDF Spain (COO) Moneyman Spain Compliance IDF Spain Spain
17+ years of experience 15+ years of experience 11+ years of experience 15+ years of experience 5+ years of experience
23Appendix 2. Corporate and shareholder structure
Venture capital Boris Batine, CEO
Angel Investors Management Crowdcube
(Zilencium Limited) Alex Dunaev, COO
20.6% 29.4% 40.2% 4.2% 5.6%
ID Finance
Investments, S.L.
(Spain)
IT and Risk
IDFinance IDF
ID Finance Brazil IDF CAPITAL
Spain S.L.U. Technology
(OpCo) (Subholding)
(OpCo) (Belarus)
0.1% 1% Branch
(Mexico)
IDF LAB
IDF Servisios Online
FIDC (Russia)
(OpCo) Collect
Debt
management
partners S.L.UAppendix 3. IDF Spain: financial statements
Income statement 9M 2020 results
EUR m 9M 2020 9M 2019 2019 2018
▪ 47% revenue growth vs 9M 2019
Issuance 87.1 70.2 100.4 43.9
▪ Maintained strong profitability 7.2%
Revenue 47.5 32.3 48.5 23.0
Impairment Charges -28.8 -21.0 -30.2 -14.3 ▪ Although clients quality have not
Operating Expenses -9.6 -6.3 -9.0 -6.3 deteriorated through 9M 2020, we
Operating profit 9.2 5.0 9.3 2.5 maintain conservative approach to
-2.1 -1.5 -2.2 -1.1 provisioning due to market uncertainty
Interest expense
Admin and Other Expenses -2.5 -1.7 -2.7 -1.2 ▪ Net profit of EUR 3.4m in 9M 2020
Profit before tax 4.6 1.8 4.4 0.1
▪ Strict cost control and improvement of
Tax -1.1 -0.0 -1.1 0.0
cost/revenue ratios despite decreasing
Net Income 3.4 1.8 3.3 0.1
issuance volumes in Apr-May 2020
KPIs
Revenue growth, % 47% 127% 111% 135%
Operating margin, % 19.3% 15.5% 19.1% 10.8% IDF Spain is audited by
PBT margin, % 9.6% 5.5% 9.0% 0.5%
Net income margin, % 7.2% 5.5% 6.7% 0.3%
Interest coverage 3.2 2.2 3.0 1.1
25Appendix 3. IDF Spain: financial statements
Balance sheet 9M 2020 results
€m 9M 2020 2019 2018
Cash 4.8 4.6 1.2 ▪ Liquidity buffer: keep liquidity at a level over
Net portfolio 24.4 23.3 11.4 10% of assets
Other assets 14.7 5.1 2.2
▪ Control for portfolio quality: decrease from
Total assets 43.9 33.0 14.8
43.7% to 28.4% in 9M 2020
Loans and borrowings 31.2 23.4 12.7
▪ Strengthening equity/asset ratio of 20.1% for
incl. Intercompany loans 0.0 4.9 7.0
9M 2020 vs 16.4% in 2019
Other liabilities 3.8 4.2 2.9
Equity 8.8 5.4 -0.9 ▪ Leverage keeps decreasing from 4.3 to 3.5
Total liabilities and equity 43.9 33.0 14.8 debt/equity ratio
KPIs
▪ Strong income/asset ratio of 16%
Cash / Assets 11.0% 13.9% 8.4%
(annualized) despite the crisis
Equity / Assets 20.1% 16.4% neg.
Debt / Equity 3.53 4.33 neg.
Net Debt / Equity 2.99 3.48 neg.
Pre-tax income / av.assets 15.9% 18.2% 1.0%
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