Finland Poland Spain Ireland. Consumer lending Secured pawn lending Small business advance Check cashing Bought gold Prepaid debit cards

Transcription

1 DFC Global Corp.

2 Company Overview Market Diversification Canada U.K. U.S. Sweden Finland Poland Spain Ireland Product Diversification Consumer lending Secured pawn lending Small business advance Check cashing Bought gold Prepaid debit cards Money orders Money transfer Foreign exchange Electronic tax filing Other Sales Channel Diversification Retail stores Internet lending Mobile phone lending In-home lending (Poland) 1

3 Our Customer is ALICE & ARTI Who is ALICE (Asset Limited, Income Constrained, Employed) Small business owner, or employee of a small business Service sector worker Generally holds more than one lower paying job to meet monthly bills and living expenses Typically cannot wait for the standard five day holding period required by banks for their paychecks to clear May face unexpected auto repair bills, medical bills, or need to purchase computers for small businesses, etc., which may require a short term loan in advance of their paycheck Who is ARTI (Asset Rich, Temporary Illiquid) Temporarily unemployed individuals with highly liquid asset collateral (gold jewelry, quality watches, etc.), who are in need of short-term credit Individuals and small business owners with credit needs in advance of income streams High net worth individuals with irregular income streams (i.e. commission sales) We are squarely focused on meeting the growing needs of ALICE and ARTI As a result of stagnant wages and rising prices for goods and services, the number of ALICE and ARTI people are increasing all around the world Small short-term and asset-backed loans (outside of home equity lines) are not typically a focus area for banks DFC is uniquely positioned through its diversified product set and sales channel strategies to meet the needs of this growing population; quick and simple short-term loans, secured jewelry (gold) pawn lending, expedient check cashing services, etc. 2

4 ALICE Opportunity Total ALICE Population Currently Targeted Countries:~150 million (1) U.S. Canada U.K. N. Europe (2) E. Europe (2) Offering multiple products through multiple channels to customers in targeted countries Consumer Lending Pawn Lending Check Cashing Other Bricks and Mortar Internet In-home Lending Other Multi-Product Portfolio DFC Global Corp. is a Themed Conglomerate Multi- Channel Strategy 1) Assumes ALICE customers represent 20% of target countries populations. 2) Countries included in Northern Europe are: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. Countries included in Eastern Europe are: Belarus, Bulgaria, Czech Republic, Hungary, Moldova, Poland, Romania, Slovakia and Ukraine. 3

5 Company is Well Positioned for Long-Term Growth With a Strong Mix of Core and Developing Businesses Revenue Funding Scandinavia Internet Lending U.K. Internet Lending Scandinavia Pawn U.K. Retail Canada U.S. Retail Product Maturity DFS Poland and Spain MCE (FY2012) $1.1B Development Stage On-going Business Development Activities Continue to Stock Product Pipeline and Further Diversify DFC Time 4

6 Revenue DFC s Proven Track Record of Market Development ($M) $350 Recent Market Expansion Stores $300 Spain (Mar 2012) Acquired 8 Stores Scandinavia (Dec 2010) Acquired 28 Stores Stores Stores $250 Poland (Sept 2010) Opened First Store $200 $150 Initial entry into Canada: Acquired 36 stores Nov 96 Stores Stores $100 Initial entry into the U.K.: Acquired 11 stores Feb 99 $50 Stores $0 Note: Store count represents company-operated stores. Canada U.K. Retail 5

7 Broad Geographic Footprint Canada: Financial Services Stores - Internet Lending Sweden: - 22 Pawn Lending Stores - Internet Lending Finland: - 13 Pawn Lending Stores - Internet Lending Ireland: - 30 Stores Poland: - In-Home Lending Business - 9 Multi-Product Stores - Internet Lending U.K.: - England 460 Stores - Scotland 43 Stores - Wales 22 Stores - Internet Lending - Traditional and High-End Pawn Lending - Small Business Advances United States: Financial Services Stores - Military Lending Services Business Spain: - 8 Pawn Lending and Gold Buying Stores U.S. Store Locations Canada (#1 in market) Store Locations U.K. (#1 in market) Store Locations Florida 104 Ontario 248 England 460 California 99 British Columbia 83 Scotland 43 Louisiana 15 Alberta 75 Northern Ireland 29 Arizona 11 Quebec 33 Wales 22 Other 75 Other 49 Republic of Ireland 1 Total U.S. 304 Total Canada 488 Total U.K. 555 Note: Store count as of June 30,

8 Diversified Revenue Base Across Products and Geographies Revenue breakdown for the fiscal 2012 fourth quarter ended June 30, 2012 Store Based Consumer Lending / Internet Pawn Check Purchased Country Other Lending Lending Cashing Gold Other (1) Total U.K. (2) 12.6% 22.5% 3.6% 2.3% 4.5% 4.2% 49.7% Canada 16.2% 0.6% 6.8% 1.0% 4.9% 29.5% U.S. 5.7% 3.1% 0.3% 2.5% 11.6% Scandinavia 3.5% 3.4% 6.9% Poland 1.1% 0.1% 0.3% 1.5% Spain 0.8% 0.8% Total 35.6% 26.7% 7.0% 12.2% 6.9% 11.6% 100.0% (1) Other includes prepaid cards, money transfer, and other non-credit services. (2) Includes Republic of Ireland. 7

9 Global Loan Portfolio Favors Markets and Products With Strong/Established Regulations Stable regulatory environment with minimum lenders licensing requirements Secured jewelry pawn lending, a long established and well accepted product, now comprises 10.0% of total lending revenue Predominately California and Florida which have some of the most robust regulations in the U.S. Well known and accepted product within Poland and Eastern Europe 1.8% Poland Pay Based Lending 8.2% U.S. Pay Based Lending 24.2% Canada Pay Based Lending 5.1% Scandinavian 4.8% Internet Scandinavian Lending Pawn Lending 5.2% U.K. Pawn Lending 18.2% U.K. Pay Based Lending 32.5% U.K. Internet Lending Recently implemented fee based provincial lending regulations FY 12 4th Quarter (1) Consumer loans regulated under Consumer Credit Act of 1974; applies to all consumer loans under 25K (1) Represents the fiscal 2012 fourth quarter results for the period ended June 30,

10 U.K. Consumer Credit Trade Association Overview of the Good Practice Customer Charter Key Commitments by the Lenders Explain how the loan works and the total cost of the loan to the customer before they apply for the loan. Perform a sound, proper and appropriate affordability assessment and credit vetting for each loan application. Explain how payments will be deducted from the customers bank account. Explain how continuous payment authority works (if applicable) and the customer s rights with respect the this process. Always notify customer by , text, letter or phone at least three days before attempting to recover payment using continuous payment authority on the due date. This notice will ask the customer to contact the lender if the customer is in financial difficulty and can not pay. Freeze interest and charges if customer makes repayments under a reasonable repayment plan or after a maximum of 60 days of non-payment. 9

11 Pawn Lending Book Comparison ($M) $160 $140 $120 $100 $80 $60 $40 $153.9 U.K. based public companies $73.4 $59.5 DFC Global Corp. has the largest pawn book in Europe (book is primarily gold jewelry) $20 $0 (1) DFC H&T (1) A&B (2) ($M) $300 $277.5 $250 DFC Global Corp. has the third largest pawn book worldwide $200 $150 $100 $50 $173.6 $153.9 $101.5 U.K. based public companies $73.4 $59.5 (1) Value of Pledge Book as June 30, 2012 (2) Value of Pledge Book as of December 31, 2011 (3) Includes U.K. company owned stores (515) and Scandinavian pawn stores (35) # of Pawn Stores $0 (1) (1) (1) (1) (1) Cash America EZ Corp DFC First Cash H&T A&B Pledge Book per Store $307,666 $252,686 $279,867 $150,307 $419,429 $341,954 Ticker Symbol CSH EZPW DLLR FCFS HTGR AMB (3) 10 (2)

12 Number of Markets The Most Diversified Company in the Sector Western Union Global Providers DFC Global Corp. EZ Corp Speedy Cash Advance America Check n Go World Acceptance Cash America Rent-A- Center ACE Cash Express First Cash Check into Cash H&T Albemarle & Bond Aaron s, Inc. QC Holdings Number of Products 11

13 DFC s Growth Strategy Encompasses Both Organic and Acquisition Growth Growth Strategy New Store Growth Internet Lending Pawn Lending New Countries New Products Organic Acquisitions 12

14 DFC S Growth Strategy is a Pathway to Increasing Shareholder Value Diversification Strategy Insulate our business from unfavorable regulatory activities in any one jurisdiction, while providing a pathway for long-term shareholder value as the new businesses we acquire are expected to provide the next generation of growth for our company. Near Term Growth Strategy : Continue opening de novo stores in our European business units, as these companies have the least number of retail financial service stores in relation to the under-banked population as compared to the U.S. and Canada. Further leverage our existing internet lending platforms into new countries principally in Europe, in order to access the growing numbers of ALICE customers in those markets. Continue acquiring pawn lending chains in select European countries augmented by de novo stores, to strengthen our position as the leading pawn lender to the ALICE and ARTI population in Europe. 13

15 Significant International Organic Growth Opportunities Population to number of under-banked retail locations ~15,000: 1 (1) ~20,000: 1 (1) ~35,000: 1 (1) Advance America 2,600 ACE Cash Express 1,650 Check Into Cash 1,100 Check n Go 1,048 World Acceptance 1,036 EZCorp 914 Cash America 891 QC Holdings 483 DFC Global Corp. 304 First Cash 263 Other 11,711 Total 22,000 Competitors: Stores Cash Store 527 DFC Global Corp. 488 Cash Money 131 Easy Financial 95 Cash Max / Cash Converters 67 Cash 4 U 51 Cash Shop 35 Other 206 Total 1,600 Competitors: Stores DFC Global Corp. 555 Cash Converters (Mainly Franchises) (2) 222 Albemarle & Bond / Herbert Brown 215 Check Centres 200 Cash Generators 200 H&T Pawnbrokers 175 Ramsdens 102 National Cash Advance 32 Other 99 Total 1,800 Not a focus area for the Company Highly Fragmented Market DFC Global Corp. is three times the size of its nearest competitor in customer volume Strong Brand in a Under-served Market (1) Population to number of under-banked retail locations (2) Cash converters store count comprised of 167 franchised stores and 55 company operated stores DFC Global Corp. is the largest financial services provider in the sector Strong Brand in a Significantly Under-served Market 14

16 Recent Acquisitions Further Diversify DFC Global and are Immediately Accretive 15

17 Risicum Finland and Sweden Internet Lending (Acquired July 2011) Business Overview The leading provider of internet and telephony based loans in Finland Also provides loans through both internet and mobile phone technology in Sweden Founded in 2005 and based in Helsinki, Finland Loans are delivered through multiple brands which target specific customer demographics Primarily single payment loans with a 14 to 90 day term Acquisition Rationale Expands European footprint and customer reach Fragmented competitive landscape and large underserved ALICE demographic offers significant growth opportunities in Finland and Sweden Strong management team with extensive industry experience Long-standing product regulations in Scandinavia Platform is scalable for expansion to other countries (Already leveraging platform to offer internet loans in Poland) Was immediately accretive to DLLR earnings 16

18 MEM Limited U.K. Internet Lending (Acquired April 2011) Business Overview The Company is a leading provider of internet loans in the U.K. offered to customers through its trademarked brands Founded in 2003 and based in Bicester, England Core product is a single payment loan with a 30 day term Acquisition Rationale Stable and scalable platform, as well as industry leading credit analytics to sustain future growth; can leverage platform in other countries Experienced management team with strong business acumen and industry experience Defends against U.S. based industry competitors gaining substantial entry market position in the U.K. Minimal customer overlap with DFC Global Corp. s existing U.K. internet and store based business Enhances our global bricks and clicks diversification strategy Combined with DFC Global Corp s. existing internet lending business, established Company as a leading provider of internet loans in the United Kingdom 17

19 Company is Transforming Itself Into a Diversified Global Enterprise Positioned For Long-Term Growth Approximately 44% of total Company EBITDA was generated from products, geographies and sales channels acquired or developed over the last three years Core Businesses Well established core businesses with strong brands in Canada and the U.K.: - Store Based Consumer Lending - Check Cashing - Money Transfers - Pawn Lending - Debit Cards - Foreign Exchange New Businesses 44% Current EBITDA Distribution (1) New Markets / Channels Scandinavia Pawn Lending U.K. High-End Pawn Lending Global Internet Lending Poland In-Home Lending Gold Purchasing (Canada, U.K., U.S.) U.S. Military Lending Services Spain Pawn Lending New Businesses Anticipate significant percentage of future EBITDA will come from new markets, platforms and products Core Businesses Canada Retail Clarified regulatory environment provides market growth and acquisition opportunities U.K. Retail Significantly underserved market provides substantial opportunity for further expansion U.S. Retail Store concentration in states with stable regulations (1) Figures are as reported for the fiscal quarter ended June 30, Future EBITDA Distribution 18

20 Financial Metrics 19

21 Strong Track Record of Revenue Growth ($M) $1,100 $1,000 $1,061.7 $900 $800 $783.2 $700 $647.4 $600 $544.9 $561.3 $500 $463.6 $400 $373.3 $300 $200 $338.4 $225.9 $266.7 $100 (1) (1) (1) (1) (1) (1) (1) Q Q4 (2) (3) (4) (1) Figures for the fiscal years ended June 30, translated at the average currency exchange rates in place for the fiscal year ended June 30, (2) Revenue as reported for the fiscal year ended June 30, (3) Figures for the fiscal fourth quarter ended June 30, 2011, translated at the average currency exchange rates in place for the fiscal fourth quarter ended June 30, (4) Figures as reported for the fiscal 2012 fourth quarter ended June 30,

22 Robust EBITDA and Cash Flow Growth ($M) $325 $275 $225 $228.6 $303.7 Diversified business model and stable customer base drives strong EBITDA growth and cash flow $188.6 $175 $125 $75 $84.9 $91.3 $120.5 $137.3 $147.9 $66.4 $78.5 $163.2M $25 (1) (1) (1) (1) (1) (1) (1) (2) (3) (4) Q Q4 Adjusted EBITDA (5) FY 2012 Cash Flow Before Working Capital Changes (1) Figures for the fiscal years ended June 30, excluding one-time charges and translated at the average currency exchange rates in place for the fiscal year ended June 30, (2) Adjusted EBITDA as reported for the fiscal year ended June 30, (3) Figures for the fiscal fourth quarter ended June 30, 2012, translated at the average currency exchange rates in place for the fiscal fourth quarter ended June 30, (4) Figures as reported for the fiscal 2012 fourth quarter ended June 30, (5) Figures for the fiscal ended June 30,

23 Strong Operating EPS Performance $3.00 $2.50 $ $2.55 $2.00 $2.16 $1.50 $1.00 $1.35 $1.59 $0.50 $0.00 (1) 2010 (1) 2011 (1) 2012 FY 2013 Guidance (1) (1) Figures for the fiscal years ended June 30, reflects diluted operating earnings per share excluding one-time and other non-cash charges and credits. 22

24 Consolidated Loan Loss Performance 25.0% 20.0% 19.5% 22.2% Target Range for Future Given Rapid Growth of Internet Lending Platforms 20.2% 18.4% 18.6% 19.7% 20.6% 20.8% 15.0% 10.0% 17.8% Development of Global Credit Analytics Group and Creation of Proprietary Credit Scoring Models 15.1% 15.4% 13.1% 13.9% 15.2% 16.6% Internet Loans Typically Carry Moderately Higher Loan Losses but with Significantly Lower Fixed Operating Costs than the Store Based Businesses 18.0% Significant Growth of Global Internet Lending Business; Higher mix of new customers 5.0% (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) 1) Q1 represents three months ended September 30, Q2 represents three months ended December 31, Q3 represents three months ended March 31, Q4 represents three months ended June 30. 2) Figures represent consolidated loan loss provision expressed as a percentage of consolidated gross consumer lending revenue. 23

25 Consolidated Loan Loss Performance (% of Loan Originations) 5.0% 2.5% 3.0% 3.4% 2.7% 3.0% 2.6% 2.7% 2.4% 2.5% 2.8% 3.6% 3.1% 3.7% 4.2% 4.2% Significant Growth of Global Internet Lending Business; Higher mix of new customers 4.6% 4.7% 0.0% (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) (1,2) 1) Q1 represents three months ended September 30, Q2 represents three months ended December 31, Q3 represents three months ended March 31, Q4 represents three months ended June 30. 2) Figures represent consolidated loan loss provision expressed as a percentage of consolidated consumer lending originations. 24

26 Business Outlook for Principal Markets 25

27 Canada Business Outlook Growth Outlook Clarified provincial lending regulations present an opportunity for pricing and/or increase in market share as higher cost competitors struggle to operate successfully under current provincial pricing structures Longer term, provincial regulation should expand the market, and educate and create product awareness for potential new customers who have never before taken a single payment short-term loan Continued opportunity to expand store footprint and internet lending platform; grow customer base Strategy Leverage the Company s position as the lowest cost provider; target pricing policies to maximize profitability and competitive advantage Expand customer penetration with online loan platform De novo store build program in under-penetrated markets 26

28 United Kingdom Business Outlook Growth Outlook Consumer awareness of our products and services is still growing o Total revenue growth of 26.1% for the fiscal 2012 fourth quarter compared to the fourth quarter of the prior fiscal year (a combination of de novo store expansion, internet lending growth, and accretive acquisitions). Hold a significant share of an underserved market Moderate penetration of retail locations and internet platform to unbanked and underbanked consumers presents a continuing opportunity to expand customer base Strategy Continue to expand customer base o o o Continue de novo store build program combined with accretive acquisitions Acquisition of MEM (the leading internet-based consumer lending business in the U.K.) in April 2011, in combination with the company s existing internet platform, enables rapid expansion of customer reach (significant growth opportunity) Further increase the Company s brand awareness and market leading position through targeted advertising campaigns Focus on opportunity to grow secured pawn lending business o o Capitalize on inherent gold and silver jewelry pawn expertise to grow the loan book in existing stores; currently the third largest pawn lender in the U.K. Open additional high-end pawn lending store formats, which attracts a new affluent customer segment (ARTI) 27

29 Europe Business Outlook Growth Outlook ALICE and ARTI customers exist in large numbers throughout Europe; market is largely underserved No dominant providers of financial services, jewelry pawn and secured lending products Significant expansion opportunity exists through roll-up strategy of small, inefficient, and capital constrained competitors, who generally operate solely in a single country Strategy Continue to profile marketplace competitors, and customer segments Have prioritized competitors for acquisition; aggregate acquired competitors to enhance scale and profitability Enhance Europe market leader position by: o Expanding Suttons & Robertsons high-end pawn lending to principal cities throughout the U.K. and Europe (brand targets different (affluent) customer segment-arti-asset Rich, Temporarily Illiquid) o Expanding Sefina pawn shop brand in Scandinavia and Northern Europe o Continuing to grow U.K. jewelry (gold) pawn lending portfolio o o Expanding internet and mobile phone based lending to additional countries Expand Risicum internet lending platform into other European countries Further expand the Polish Money Now store brand and in-home lending business Acquire primarily jewelry (gold) pawn store chains in selected European countries 28

30 Strong Liquidity Position to Support Global Growth Opportunities Substantial free cash flow generated from operations No near-term debt maturities, nor principal repayment requirements: $600M % senior notes due December 2016 $230M 3.250% U.S. senior convertible notes due April 2017 $45M 2.875% U.S. senior convertible notes due June 2027 $120M 3.000% U.S. senior convertible notes due April 2028 Revolving credit facilities are substantially available: Total Facilities Global Revolving Credit Facility* $235.0M (multi-currency facility) U.K. 6.0M Scandinavia SEK 365.0M, 18.8M * Principal participants in the revolving credit facility: Wells Fargo, US Bank, BMO, Soc Gen, Credit Suisse, Nomura, Deutsche Bank, Barclays Capital; facility expires March 2015; expandable to $250M. 29

31 Key Investment Highlights Strong Cash Flow and Liquidity Position to Support our Strategy Sustainable Business Model Supported by Sound Customer Value Proposition Large and Growing Underserved Global Markets Significant Organic and Acquisitive Growth Opportunities Diversified Revenue Base Proven Track Record of Successful Growth Stable Regulatory Environment in Core Markets 30

32 Forward-Looking Statements This presentation contains forward-looking statements, including, among other things, statements regarding the following: pending or recent acquisitions and their expected benefits; the Company s future results, growth, guidance and operating strategy; the global economy; the effects of currency exchange rates on reported operating results; the regulatory environment in Canada, the United Kingdom, the United States, Scandinavia and other countries; the impact of future development strategy, new stores and acquisitions; litigation matters; financing initiatives; and the performance of new products and services. These forward-looking statements involve risks and uncertainties, including risks related to: the regulatory environments; current and potential future litigation; the identification of acquisition targets; the consummation of pending acquisitions, the integration and performance of acquired stores and businesses; the performance of new stores; the impact of debt and equity financing transactions; the results of certain ongoing income tax appeals; the effects of new products and services on the Company s business, results of operations, financial condition, prospects and guidance; and uncertainties related to the effects of changes in the value of the U.S. Dollar compared to foreign currencies. There can be no assurance that the Company will attain its expected results, successfully consummate pending acquisitions, successfully integrate and achieve anticipated synergies from any of its acquisitions, obtain acceptable financing, or attain its published guidance metrics, or that ongoing and potential future litigation or the various FDIC, Federal, state, Canadian, U.K., Scandinavia, European Union, or other foreign legislative or regulatory activities affecting the Company or the banks with which the Company does business will not negatively impact the Company s operations. A more complete description of these and other risks, uncertainties and assumptions is included in the Company s filings with the Securities and Exchange Commission, including those described under the heading Risk Factors attached as an exhibit to the Company s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 9, 2012 and its Annual Report on Form 10-K for the Company s fiscal year ended June 30, You should not place any undue reliance on any forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments. 31

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