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Ferratum Oyj: Ferratum Group reports H1 performance in line with revised fiscal guidance
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DGAP-News: Ferratum Oyj / Schlagwort(e): Halbjahresergebnis
Ferratum Oyj: Ferratum Group reports H1 performance in line with revised
fiscal guidance
16.08.2018 / 07:30
Für den Inhalt der Mitteilung ist der Emittent / Herausgeber verantwortlich.
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Interim Report January - June 2018
Ferratum Group reports H1 performance in line with revised fiscal guidance
Helsinki, 16 August 2018 - Ferratum Oyj (ISIN: FI4000106299, WKN: A1W9NS)
("Ferratum" or the "Group") announces preliminary unaudited results for the
6 months ended 30 June 2018 ("H1 2018").
Financial Highlights
- Revenue of EUR 124.2 million - up 19.8% year-on-year
- Operating profit (EBIT) of EUR 18.1 million - up 21.4% year-on-year
- EBIT margin of 14.6%
- Profit before tax (EBT) of EUR 9.7 million - down 17.3% year-on-year due
to increased finance costs
- Net finance costs of EUR 8.4 million (H1 2017: EUR 3.2 million). The
increase is mainly due to both foreign exchange losses (H1 2018: EUR 2.8
million loss vs H1 2017 EUR 0.4 million gain) and interest on increased bond
volumes
- EPS (basic and diluted) decreased 17.4% to EUR 0.38 per share
- Net book value of loan portfolio up 9.6% to EUR 282.2 million (31 December
2017: EUR 257.4 million)
- Successful placement of EUR 100 million senior unsecured bonds by Ferratum
Capital Germany GmbH
- Deposits from customers as at 30 June 2018 increased by 8.1% to EUR 188.5
million vs 31 December 2017, but is 2.2% lower than the EUR 192.7 million as
at 31 March 2018 as the Group reduced interest rates to maintain balanced
sources of funding
- Active/former customer base increased by 281,052 to 2.01 million - up
16.3% year-on-year
Corporate developments post H1 2018
- Successful listing on Nasdaq Stockholm of EUR 100 million senior unsecured
bonds by Ferratum Capital Germany GmbH
Key Figures
6 months
ended 30
June
EUR '000 2018 2017 %
chan-
ge
Revenue 124,232 103,730 +19.-
8%
Operating profit (EBIT) 18,144 14,942 +21.-
4%
Profit before tax 9,728 11,763 -17.-
3%
Profit before tax % 7.8% 11.3% -28.-
3%
Net cash flows from operating activities 59,743 51,605
before movements in portfolio and deposits
received
Net cash flows from operating activities (10,023) (5,165)
Net cash flows from investing activities (6,698) (4,164)
Net cash flows from financing activities 56,255 14,653
Net increase/decrease in cash and cash 39,535 5,323
equivalents
Earnings per share, basic (EUR) 0.38 0.46 -17.-
4%
Earnings per share, diluted (EUR) 0.38 0.46 -17.-
4%
EUR '000 30 June 31 Dec %
2018 2017 change
Accounts receivable - consumer loans 282,209 257,406 +9.6%
(net)
Deposits from customers 188,474 174,301 +8.1%
Cash and cash equivalents 170,820 131,832 +29.6%
Total assets 503,178 436,595 15.3%
Non-current liabilities 137,709 64,167 114.6%
Current liabilities 262,406 267,185 -1.8%
Equity 103,064 105,243 -2.1%
Equity ratio % 20.5 24.1
Net debt to equity ratio 2.22 1.90
Key developments and progress
Ferratum Group delivered further growth in the first six months of 2018,
building on the record performance of 2017, albeit that the relative pace of
growth was moderated by a decline in approval rates for new loans as a
result of changes to the Group's automated credit scoring processes.
Group revenues increased by 19.8% to EUR 124.2 million, with Ferratum's
premium, higher value products such as Credit Limit and PlusLoan together
representing 74.2% of this result, a marginal increase on the comparable
period in H1 2017. Microloan revenues of EUR 21.2 million continued to
represent a diminishing proportion of turnover, being 3.8% lower than
Microloan revenue for H1 2017, but this ongoing marginal decline is
reflective of the Group's successful strategy of positioning Microloans as
an initial 'beachhead' to understand customer behaviour while prioritising
longer term lending as Ferratum's brand becomes more established in each
country.
Business lending to Small-Medium Enterprises (SMEs) is becoming an
increasingly material customer segment for the Group, generating EUR 10.4
million of revenue in the first six months, an 89.3% increase on SME
revenues for H1 2017.
Ahead of the period end, the Board of Ferratum acknowledged that recent
changes to the Group's credit scoring processes were having a
counterproductive impact on loan approval rates, and on 27 June 2018 the
Board announced that Ferratum would be revising its risk assessment criteria
to ensure that the Group does not reject credit risks that have in the past
proven to be acceptable.
The objective is to ensure that Ferratum's automated credit assessment
procedures remain tailored to the specific customer payment behaviour and
hence risk tolerances that Ferratum has observed for each country of
operation in order to maintain the overall track record of growth that
Ferratum has historically achieved across all geographies of operation.
As the table of quarterly product revenues below illustrates, despite the
temporary impact on revenues of lower loan approval rates - especially in
the PLusloan segment-, the quarter-on-quarter picture indicates that Credit
Limit and PlusLoan remain stable, core drivers for growth in line with
Ferratum's product growth strategy.
Recent country launches in SME business lending (mainly UK and Australia)
have required corrective actions on credit scoring in Q2 2018 due to
suboptimal payment bahaviour, but underlying SME lending growth across
markets overall remains strong and is expected to continue its rapid growth
path.
Revenues per product per quarter
EUR
'000
Fiscal Microlo- PlusLo- Credit SME Mobile Bank / Total
quarter an an Limit Other
Q1 2016 13,426 5,458 13,823 476 30 33,213
Q2 2016 13,567 7,405 15,348 837 57 37,215
Q3 2016 11,942 7,913 17,010 1,227 126 38,218
Q4 2016 13,901 9,456 20,264 1,710 152 45,483
Q1 2017 13,975 11,294 22,329 2,390 21 50,009
Q2 2017 8,020 17,152 25,391 3,127 32 53,722
Q3 2017 10,729 15,456 27,574 3,483 33 57,276
Q4 2017 11,162 16,413 28,480 4,134 444 60,632
Q1 2018 11,058 15,852 28,901 5,508 123 61,442
Q2 2018 10,110 16,326 31,139 4,937 277 62,789
As previously communicated, the Group expects modest contributions from the
Mobile Bank and Partnerships while Ferratum continues to develop its suite
of Mobile Bank services and assess the commercial potential for its pilot
partnership project in Sweden with Thomas Cook Money.
Operating profit (EBIT) for H1 2018 increased by 21.4% year-on-year to EUR
18.1 million. The EBIT profitability margin remained near the midpoint of
Ferratum's 2018 fiscal guidance range, with a marginal improvement to 14.6%
for H1 2018, from 14.4% for H1 2017, as a result of lower realised credit
losses (impairment on loans) and stable marketing costs compared with H1
2017. The gross impairment on loans ratio improved from 34.6% in H1 2017 to
32.7% for H1 2018.
Operational developments
As announced at 27 June 2018, the Group is taking remedial action to ensure
that the Group's automated credit assessment processes do not reject credit
risks that have in the past proven to be acceptable. These measures are
being rolled out and tailored to address the specific customer behaviour and
risk profiles across all countries of operation. Furthermore, Ferratum will
be undertaking a number of additional management actions to improve
performance, including the strengthening of top management, staff
streamlining, the rebalancing of resources to prioritise enhanced risk
management and automation of lending processes in existing markets, and a
review of all geographies with a view to potentially withdrawing from one or
two non-performing countries.
Finance and treasury update
Due to the adoption of the new IFRS 9 accounting standard - with effect from
1 January 2018, the risk provisions of the Group had to be increased by EUR
9.2 million from this effective date. This one-time increase of the risk
provision reduced the equity of the Group by EUR 7.5 million as the
increased risk provisions were partially offset by deferred tax assets of
EUR 1.7 million. The adjustment was booked directly to the Group's equity
and did not affect the reported profit for H1 2018. Overall, Group equity
decreased marginally to EUR 103.4 million as at 30 June 2018 from EUR 105.2
million as of 31 December 2017. The net debt to equity ratio remains strong
at 2.2x and comfortably below the limit of 3x as required by Ferratum's bond
covenants.
The profit before tax (EBT) declined by 17.3% y-o-y to EUR 9.7 million,
mainly as a result of unfavourable foreign exchange movements during H1 2018
attributable to the weakening of the Swedish Krona and the Polish Zloty, as
illustrated in the following table:
EUR '000 Q2 2018 Q1 2018 H1 2018 H1 2017
AUD 0.045 -0.193 -0.148 -0.124
CZK -0.381 0.049 -0.322 0.423
PLN -0.964 -0.284 -1.248 0.197
GBP -0.080 0.131 0.051 -0.061
SEK -0.271 -0.900 -1.172 -0.044
Other currencies 0.046 0.043 0.089 0.005
FX impact on P&L -1.605 -1.154 -2.759 0.396
The Group has substantial credit portfolios. Due to increasing foreign
exchange volatility, Ferratum's intention is to further increase the
proportion of its currency exposure that is hedged.
Net receivables from customers grew by 9.6% to EUR 282.2 million from EUR
257.4 million. Deposits from customers increased by 8.1% to EUR 188.5
million vs EUR 174.3 million as at 31 December 2017, but is 2.2% lower than
the EUR 192.7 million as at 31 March 2018 as the Group reduced interest
rates to maintain balanced sources of funding and capital adequacy ratios.
The intention of management is to further reduce the inflow of deposits as
appropriate to ensure that the Group optimizes its liquidity position.
During the second quarter, Ferratum Capital Germany GmbH, a subsidiary of
Ferratum Oyj, successfully issued EUR 100 million of new senior unsecured
bonds in order to refinance its outstanding EUR 45 million of bonds maturing
in October 2018. The additional funds raised will be used to finance
continued growth of the Group. The new senior unsecured bonds have a coupon
of 3 months Euribor plus 5.50 per cent p.a. and a tenor of four years. The
bonds have been listed on Frankfurt Stock Exchange Open Market and after the
period end been listed on Nasdaq Stockholm with ISIN: SE0011167972. The
Group intends to also list the bond on the Frankfurt Stock Exchange Prime
Standard (best effort basis) in Q3 2018. The bond has a tap option which
allows Ferratum to increase the volume by an additional EUR 50 million.
Ferratum's group rating of BBB+ was reconfirmed by Creditreform AG during
March 2018 in its regular annual review.
During the Annual General Meeting held in Helsinki on 19 April 2018,
shareholders approved the payment of a final dividend of EUR 0.18 per share
for the financial year 2017.
Subsequent events
On 13 July 2018 Ferratum Bank p.l.c., a wholly owned subsidiary of Ferratum,
announced that the EUR 40 million of senior unsecured bonds due March 2020
with ISIN FI400023283 ceased to be listed on the European Wholesale
Securities Market (EWSM) with effect from 13 July 2018 as a result of the
decision by Euronext N.V. to close the EWSM with effect from the same date.
Ferratum Bank p.l.c. has not sought to list the bonds on any other Maltese
exchange, but bondholders should note that the bonds remain listed and
tradable on Nasdaq Stockholm (regulated market) and Frankfurt Stock Exchange
(Open Market).
2018 Outlook
The focus of management in H2 2018 is to ensure that the recently announced
measures to restore historic trends in Group revenue growth are effective.
Furthermore, Ferratum will be undertaking a number of additional management
actions to improve performance, including the strengthening of top
management, staff streamlining, the rebalancing of resources to prioritise
enhanced risk management and automation of lending processes in existing
markets, and a review of all geographies with a view to potentially
withdrawing from one or two non-performing countries.
The second quarter trends in product revenues provide some early indications
that a recovery in credit approvals is underway, and management is
continuing to prioritise growth in SME business lending and Primeloan to
become increasingly significant segments enhancing the CLV of the Group's
customer base. At the same time the Group continues to invest in its Mobile
Bank, progress its pilot project with Thomas Cook Money and pursue broader
opportunities to expand Ferratum's financial services platform model with
other potential joint venture partners.
The Board of Directors of Ferratum Oyj reaffirms that revenues for the
fiscal year 2018 are expected to be within the range of EUR 260 million and
EUR 280 million, while the estimate for operating profit margin (EBIT
margin) is reconfirmed to be within the range of 13% and 16%.
Ferratum Oyj bases this guidance on certain assumptions, including:
- Consumer credit volumes continue to grow, exceeding the market average,
based on new customers, continued diversification of consumer lending
products and growth in new markets
- Moderate expectations on the 2018 contribution of new revenue streams from
partnerships, mobile bank innovations
- Ferratum Business (SME) continues to grow as market share in the 8
existing markets is small and expected to increase
- Ferratum Mobile Bank will generate new customers, increased customer
loyalty, cross-selling opportunities, increased deposit volume and
diversified deposit currencies
- No material negative changes in the consumer and business credit markets
- Stable capital market conditions
- No unexpected significant new regulatory challenges or changes
About Ferratum Group:
Ferratum Group is an international provider of mobile banking and digital
consumer and small business loans, distributed and managed by mobile
devices. Founded in 2005 and headquartered in Helsinki, Finland, Ferratum
has expanded rapidly to operate in 25 countries across Europe, Africa, South
and North America and the Asia-Pacific region.
As a pioneer in digital and mobile financial services technology, Ferratum
is at the forefront of the digital banking revolution. Ferratum's mobile
bank, launched in 2016, is an innovative mobile banking platform offering a
range of banking services, including real time digital payments and
transfers, within a single app. It is currently available in five European
markets. Ferratum has approximately 2 million active and former customers
who have an account or have been granted one or more loans in the past (as
at 30 June 2018), of which over 780,000 customers have an open Mobile Bank
account or an active loan balance in the last 12 months.
Ferratum Group is listed on the Prime Standard of Frankfurt Stock Exchange
under symbol 'FRU.' For more information, visit www.ferratumgroup.com.
Contacts:
Ferratum Group Dr. Clemens Krause Ferratum Group Paul Wasastjerna
Chief Financial Officer T: + 49 (0) Head of Investor Relations T:
30 921005844 E: +358 40 7248247 E:
[1]clemens.krause@ferratum.com 1. [1]paul.wasastjerna@ferratum.com
mailto:clemens.krause@ferratum.com 1.
mailto:paul.wasastjerna@ferra
tum.com
UK / European media enquiries:
Smithfield, A Daniel J Edelman
Company Alex Simmons | Brett Jacobs
T: +44 20 3047 2543 | +44 20 3047
2537 E:
[1]asimmons@smithfieldgroup.com E:
[2]bjacobs@smithfieldgroup.com 1.
mailto:asimmons@smithfieldgroup.com
2.
mailto:bjacobs@smithfieldgroup.com
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16.08.2018 Veröffentlichung einer Corporate News/Finanznachricht,
übermittelt durch DGAP - ein Service der EQS Group AG.
Für den Inhalt der Mitteilung ist der Emittent / Herausgeber verantwortlich.
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Sprache: Deutsch
Unternehmen: Ferratum Oyj
Ratamestarinkatu 11 A
00520 Helsinki
Finnland
Telefon: +49 (0) 30 9210058-44
Fax: +49 (0)30 9210058-49
E-Mail: ir@ferratum.com
Internet: https://www.ferratumgroup.com
ISIN: FI4000106299
WKN: A1W9NS
Börsen: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, Hannover,
München, Stuttgart, Tradegate Exchange
Ende der Mitteilung DGAP News-Service
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Ferratum Oyj: Ferratum Group reports H1 performance in line with revised fiscal guidance
Am 16. August 2018 um 07:31 Uhr
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