UNIFIN · features, which help Unifin to significantly outgrow the Mexican economy 27+ +16% Market...
Transcript of UNIFIN · features, which help Unifin to significantly outgrow the Mexican economy 27+ +16% Market...
UNIFIN 2Q20 Results
1
www.unifin.com.mx | 2
Agenda
1 Business Update and Current Initiatives
3 Financial Highlights
2 COVID-19 Update
www.unifin.com.mx
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Business Update and
Current Initiatives
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$1,154 $1,669 $1,935 $2,664 $3,903 $6,155 $9,297 $11,488
$18,855
$30,142
$41,672 $45,149
$58,611 $63,826
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1H20
2.3% 1.1%
(5.3%)
5.1% 3.7%
3.6%
1.4% 2.9%
3.3%
2.6% 2.1% 2.2%
(0.3%)(1.4%)
Unifin: a Leading NBFI
Almost three decades of a unique
business model which was built based
on client-centricity and financial
education
Self-reinforcing ecosystem
complemented by a superior product
platform covering huge market needs
Thorough understanding of the under-
penetrated Mexican financial system
with an enormous growth opportunity
Adaptability and resiliency as core DNA
features, which help Unifin to
significantly outgrow the Mexican
economy
27+
+16% Market
Share(1)
4 Pillars That Underpin Our Successful Story
Years
Unifin’s Total Portfolio vs. Mexico’s GDP Growth Evolution
Total Portfolio (MXN$ mm) – CAGR 2017-1H20: 33.2%
Mexico GDP Growth (%) – CAGR 2017-1H20: 1.7%
Unifin’s CAGR above Mexico GDP by ~31.5%
Sound Measures Taking Unifin in the Right Direction
Despite current COVID-19
complications, Unifin’s credit ratings
have been ratified
Unifin has successfully renewed
MXN$12 bn of outstanding debt to
cover its working capital requirements
Sources: Bloomberg. Note: (1) SME loan portfolio market share as of May 2020.
www.unifin.com.mx | 5 Sources: Base Point of Interest, Pitney Bowes 2019
SME Addressable Market by Company Size
UNIFIN’s target market: 239,000 SMEs
Revenues of MXN$10 to $1,000 million, 10 – 500 employees, solid credit history
SMEs account for 9/10 businesses, 50% of Mexico’s GDP and 2/3 of the job market
Our Distribution Channels
Unifin’s Target Market
74%
86%
26%
14%
Latam
Average
Mexico
Demand not served Current Credit Offer
Highly Underserved SME Financing Market
(MXN$ mm; % of total SME addressable market) (%)
92%
4% 3% 1%
< $100
$100 - $200
$201 - $500
> $500
B2B Prospecting
Model
Strong Sales Force
of ~150 Agents Digital Platform
Structured into Relationship Managers and Specialized
Product Executives
SME database segmented by industry, geography, headcount, turnover
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Total Addressable Market by Industry Distribution
(% of addressable SME market)
Commerce
29%
Services
22% Construction
11%
Manufacturing
8%
Transportation
4%
Other
26%
Healthcare Products
Retail
Agriculture Media
Retail and Wholesale
E-commerce Financial and Insurance Services
Well-identified Opportunities in Key Sectors
Significant Presence in States with Solid Growth Potential
(2020E State GDP Growth vs. Mexico 2020E GDP Growth)
Unifin’s Target Market (Cont’d)
Significantly Above
Above
Below
Significantly Below
There are significant
imminent opportunities
in diverse industries
across Mexico’s
economy
19 states are expected
to recover at a faster
rate than the country
average. Unifin holds
presence in 10/19 of
these markets
Significantly Above
Above
Below
Significantly Below
Unifin Presence
~25% of Unifin’s total
loans portfolio are
exposed to the
USMCA’s supply chain,
expected to recover
faster than the national
average
Sources: Base Point of Interest, Pitney Bowes 2019
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Accelerating Finance for SMEs
The expanded product portfolio strives to serve our clients’ specific needs while generating steady returns with diversified risk
Under a single product sale, there is a 5% - 20% probability of finalizing a sale to a new customer
A diverse product portfolio has a higher potential of cross- / up-selling, with the probability increasing to 60% - 70% for existing customers
o Our extended lineup and complementary services, including Uniclick, seek to take advantage of these cross- / up-sale opportunities
Unifin benefits from a decreasing customer acquisition cost and an increasing addressable target market due to the inclusion of
its expanded lineup of complementary services
Our Client-Centric Mission
Estimated
Market
Size
(MXN$ bn)
Market
share
(%)
Portfolio
yield
(%)
Product Lineup and Complementary Services Portfolio Expansion
Leasing Factoring Auto Loans
SOS Short-Term Loans
Unsecured Loans Fleet Services
~$390 ~$220 ~$12 ~$78 ~$8 ~$70
~27% ~9% ~17% < 1% < 1% ~1%
~19% ~17% > 70% ~29% ~25%
Ins. Brokerage
~$700
< 1%(1)
~65 –
70%(2) ~17%
Medium-Term Secured Loans
~$474
~1%
~20%
Today Future
Notes: (1) Based on GWP sold. Unifin does not hold the underwriting risk of the insurance premiums sold via its brokerage business. (2) EBITDA margin.
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Uniclick’s Key Takeaways
Smooth / efficient online
credit authorization process
(< 5 minutes)
Proprietary big data and
artificial intelligence
capabilities
Backed by UNIFIN’s
27 years of experience
Specialized debt collection
team
Unique powerful technological platform
built to adapt, strengthening relationships
with clients
Nationwide digital presence
with physical branches in
18 different states
Improve Unifin’s
coverage providing
financial solutions for
the vast majority of
unserved SMEs in
Mexico
Reduce client
acquisition cost and
enable upselling
opportunities
Contribute to UNIFIN’s
one-stop shop strategy
with complementary
products
A new way to reach our
clients more efficiently,
leveraging our
technology
Uniclick’s client acquisition cost is 8.3x lower than Unifin's overall acquisition cost
Rewriting the Rules and Creating Powerful New Ways to Engage with the Customer at a Lower Cost
Snapshot
Market underserved by
banks but well-known by
Unifin, which we
leverage for cross-
selling opportunities
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Premier Alliances Reinforce Our Mission-Critical Focus
Symbiotic
Ecosystem of
Partnerships and
Alliances
Strategic
Partnership
Digital Accelerator:
Unifin’s unique digital accelerator in Mexico includes tools for SMEs to improve profitability
Propel Current
Capabilities
Increase Data
Flow
Acquire New
Clients
Differentiated Partnership with Google
Become the leading platform that offers innovative
digital financial solutions and business services to
the ever-dynamic SME segment
Propel Uniclick’s digital platform growth and enable
a provision of pinpointed financial solutions for the
lower SME mass market
Contribute in the development of digital marketing
and artificial intelligence capabilities in order to
reach new clients at a reduced acquisition cost and
to build stronger relationships (cross-selling and
upselling)
Delivery of educational programs to UNIFIN’s client
base, accelerating their digital transformation and
enabling digital presence within their markets
Provide Uniclick’s clients with real-time feedback of
their online business, based on geographic
location, target market and product specifications
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COVID-19 Update
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COVID-19: Our Priorities
Keeping our People
Safe
Same Mission
Stronger than Ever:
Support our
Customers and the
Mexican Economy
Commitment with our
Shareholders:
Financial Discipline
COVID-19 insurance coverage for all employees and family members
Symptom monitoring, online medical consultations and continuous
testing
Psychological assistance to ensure well being
Guarantee proper home office
Offices conditioned for social distancing practices
Strong balance sheet: increase loan loss reserve, no FX risk
Cash flow preservation: expense reduction
Underwriting criteria for new origination
Client Support Plan: granting 3 – 4 months portfolio extensions to our
vulnerable clients (12.7% of our total portfolio)
Strategic alliances: provide our clients with the necessary digital tools
to bridge towards recovery
Daily Management Committees: maintain responsiveness and agility
during uncertain times
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COVID-19: Impact on Unifin
Client Support Plan Breakdown
Product
Clients
Included
(#)
% of Total
Clients
(%)
Outstanding
Balance
(MXN$ mm)
% of Total
Portfolio
(%)
Differed
Payments
(MXN$ mm)
Leasing 784 10.2% $7,124 11.2% $995
Auto Loans 314 4.0% $503 0.8% $12
Factoring 26 0.3% $353 0.6% $120
Uniclick 81 1.1% $82 0.1% $78
Total 1,206 15.5% $8,089 12.7% $1,205
59% 29%
3% 10%
87%
8% 4% 1%
Leasing Auto Loans Factoring Uniclick
Breakdown by Product (% of Clients Included)
Breakdown by Product (% of Outstanding Balance)
Breakdown by Client Industry (% of Clients Included)
Unifin Clients’ Breakdown by State (% of Clients Included)
Mexico City 19.4%
State of Mexico 13.1%
Querétaro 8.1%
Guanajuato 6.9%
Nuevo León 6.1%
Top States by % of Total
We maintain our entrepreneurial and long-term vision in this challenging environment, with the ambition to serve our clients and
create value for our shareholders
53.6%
0.6%
3.7%
8.5%
16.6%
18.6%
21.5%
30.2%
Financial Services
Agriculture
Construction
Commerce
Services
Manufacturing
Transport
www.unifin.com.mx
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Financial Highlights
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98.8%
0.3% 0.2% 0.7%
Portfolio and NPLs
Leasing, 74.7%
Factoring, 3.6%
Auto loans, 4.6%
Structured leasing &
others, 17.1%
Total Portfolio Composition
(%)
$45,149
$58,611 $50,386
$63,826
3.1%
4.1% 3.8%
5.7%
2018 2019 2Q19 2Q20
Total Portfolio NPL Ratio
NPL as % of Total Portfolio
(MXN$ mm; %)
NPL and NPL Coverage Ratio
Leasing Factoring Total NPL: 10.9% Total NPL: 6.8%
79.8%
5.9% 7.5% 6.8%
Leasing
89.1%
0.6% 1.9% 8.4%
0-30 31-60 61-90 > 90
43.5%
Loan Loss Reserves
100.0%
0-30 31-60 61-90 > 90 Loan Loss Reserves
Auto & Other Loans
Total NPL: 1.2%
100.0%
0-30 31-60 61-90 > 90 Loan Loss Reserves
(%)
1Q20 NPL
at 4.3%
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Reserves, Capitalization and Leverage
3.8
5.5
3.5
4.9 4.5
2Q19 2Q20
Financial Financial (ex. MTM) Financial Pro Forma
Capitalization Leverage
(x) (%)
Reserves Breakdown (MXN$ mm)
% Recovery Est. Recovery value NPL +90 Gain (loss) Potential charge-off
100.0% $2,918 $3,243 $(324) $1,088
90.0% $2,627 $3,243 $(616) $796
80.0% $2,335 $3,243 $(908) $504
75.0% $2,189 $3,243 $(1,054) $358
62.7% $1,831 $3,243 $(1,412) $0
Reserve $(1,412)
19.7
18.0
21.4
20.4
21.4
2Q19 2Q20
Accounting Adjusted (ex. MTM) Pro Forma
*
*Pro forma considering MXN 2.5 bn of capital increase related to the rights offering.
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Balance Sheet Overview
70.5% 79.9%
7.6% 1.6%
21.9% 18.5%
2Q19 2Q20
Fixed Cap @ 7.5 Variable
25.2%
74.8%
Secured Unsecured
70.8%
29.2%
USD$ MXN$
Rates MXN$ vs. USD Secured vs. Unsecured
(%)
(%) (%)
26.4%
12.3% 10.1%
13.9%
37.3%
Financial Debt
46.2%
26.5%
16.5%
7.6% 3.2%
0-12 months 13-24 months 25-36 months 37-48 months 49-80 months
Total Portfolio
Maturity Profile
57.1% 46.4% 61.2% 182.9% 1,165.6% Debt / Portfolio
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Balance Sheet Overview (Cont’d)
9.23% 8.92%
10.72% 9.93% 9.97%
Securitization BankingLines
InternationalBonds
Total Total(inc. Perpetual Bond)*
Weighted Average Cost of Funding
(%)
(MXN$ mm) 6M20 % of Total 6M19 % of Total Var.% Average maturity
(Months)
International Notes $41,119 55.3% $21,411 39.7% 92.0% 60
Revolving lines $8,115 10.9% 7,951 14.7% 2.1% 7
Term loans $12,587 16.9% $7,804 14.5% 61.3% 18
Securitizations $12,573 16.9% $16,782 31.1% (25.1%) 36
Total Financial Liabilities $74,394 100.0% $53,949 100.0% 37.9% 43
Financial Liabilities
Perpetual Notes have an interest rate of 10.64%
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$3,215
$3,817
$915 $1,068 7.8% 7.4%
7.9% 7.1%
2018 2019 2Q19 2Q20
NIM
Var. 16.6% Var. 18.7%
(MXN$ mm; %)
$1,092 $1,377
$352 $372 12.5% 12.8%
13.5% 13.3%
2018 2019 2Q19 2Q20
Admin. Expenses Opex
Administrative Expenses and OpEx as % of Revenue
(MXN$ mm; %)
Var. 5.5% Var. 26.1%
22.2
17.1
$9,739
$11,161
2Q19 2Q20
ROAE Total Equity
42.5
29.0 $5,208
$6,630
2Q19 2Q20
ROAE
(MXN$ mm; %)
Ex. Perpetual
3.4
2.2
$66,659
$89,017
2Q19 2Q20
ROAA Total Assets
ROAA
(MXN$ mm; %)
NIM, Expenses and Profitability
UNIFIN 2Q20 Results
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www.unifin.com.mx
Appendix
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` ` ` ` `
Uniclick’s Product Portfolio
Product Lineup and Complementary Services Portfolio Expansion Today Future
PM PFAE
Product
Description
Short-term
loans to
companies
$200k to
$2.5 mm
Facility
Size (MXN$)
Interest
Rate
Tenor
Starting
at 30%
24
months
Short-term
loans to sole
proprietorship
$200k to
$500k
Starting
at 30%
24
months
Short-term
loans
$200k to
$10.0 mm
Starting
at 23%
24 to 48
months
Mortgage
credits
Corporate
credit
cards
Revolving
consumer
financing
Digital
factoring
platform
Business
mgmt.
software
-- -- -- -- --
-- -- -- -- --
-- -- -- -- --
New products under development
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Our Leadership: Key Management
Sergio
Camacho CEO
• Mr. Camacho is in charge of Unifin’s top management
• Sergio is responsible for managing the key decisions to take Unifin towards its
mission and vision
24 4
• Mr. Cancino has a long track record in financial planning, accounting and taxation
• Sergio has been instrumental in building the strength of the finance and
accounting division
37 5
Jose Ramon
Diaz Chief Leasing Officer
• Mr. Diaz has led and implemented innovative changes in the leasing business for
the last 5 years
• Jose Ramón supervises that all leasing transactions follow high-quality execution
processes for our clients
17 2
Juan Jose del
Cueto Chief Operating
Officer
• Mr. Cueto is in charge of implementing, developing and directing new
businesses
• Juan José is also leads internal and administrative control processes
39 13
Guillermo
Garcia Legal Counsel
• Mr. Garcia is in charge of overseeing all legal matters within Unifin
• Guillermo has helped to supervise and coordinate financial transactions
such as senior notes and securitizations
21 3
Federico
Castillo Chief Credit Officer
• Mr. Castillo is in charge of credit risk control of the Company
• Federico has 45 years of experience in the financial markets. He has been
key in the improvement of control and analysis of all of our market operations 45 1
Emilio Lang Chief Customer Service Officer
• Mr. Lang is in charge of our innovative Customer Service Team
• Emilio leads the development of strategies to continuously improve customer
experience
26 1
Sergio
Cancino Chief Financial Officer
Total Experience At Unifin
Claudia Ortega Chief Business
Innovation
• Mrs. Ortega is responsible for the business innovation team
• Claudia oversees business optimization through innovative strategies and
data driven analysis
32 2
www.unifin.com.mx | 23
Environmental, Social & Governance
ESG Highlights
MXN$20 mm
In charitable giving
programs per year
+180,000
Impacted kids in diverse
situations, such as
childhood cancer, education
and orphans
150
Volunteers
Involved in ESG projects in
the last year
+190,000
Families helped through
community engagement
programs in the last year
ESG Model
Responsible
Financial Solutions to
SMEs
Trusted and
Sustainable Partner
Provide Added Value
Services to Society
Highly-transparent
Reporting
Focused on Business
Ethics Practice
Implement Solutions
Through Employee
Engagement
Influence Community
Positively for Unifin’s
Stakeholders
Diversity and Quality
of Life for Employees
www.unifin.com.mx | 24
Income Statement and Balance Sheet
Financial Metrics 2Q20 2Q19 Var.% 6M20 6M19 Var.%
Interest income 2,804 2,611 7.4% 5,730 5,011 14.4%
Interest cost 1,736 1,696 2.4% 3,538 3,225 9.7%
Financial margin 1,068 915 16.6% 2,192 1,786 22.8%
Financial margin (as % of income) 38.1% 35.0% 38.3% 35.6%
Loan loss reserves 628 30 1993.2% 755 89 747.3%
Adjusted financial margin 440 885 (50.3%) 1,438 1,697 (15.3%)
Admin. expenses 372 352 5.5% 744 677 10.0%
Operating income 8 490 (98.3%) 579 930 (37.8%)
Operating income margin 0.3% 18.8% 10.1% 18.6%
Comprehensive financing result 307 47 547.0% 252 185 35.6%
Net income before tax 323 547 (40.8%) 844 1,135 (25.6%)
Net income 261 453 (42.3%) 674 926 (27.3%)
Net income margin 9.3% 17.3% 11.8% 18.5%
Operating Metrics
Total portfolio 63,826 50,386 26.7%
Leasing 47,717 38,557 23.8%
Factoring 2,282 2,863 (20.3%)
Auto loans 2,927 2,851 2.6%
Structured leasing & other loans 10,900 6,115 78.3%
NPL ratio 5.7% 3.8%
Key Financial Indicators
Net Interest Margin (NIM) 7.1% 7.9%
Efficiency ratio 40.4% 42.4%
ROAA 2.2% 3.4%
ROAE 17.1% 22.2%
ROAE (excl. Perpetual Bond) 29.0% 42.5%
Capitalization (equity / net loan portfolio) 18.0% 19.7%
Capitalization (excl. MTM) 20.4% 21.4%
Equity / total assets 12.5% 14.6%
Financial leverage (excl. ABS) 5.5x 3.8x
Financial leverage (excl. ABS and MTM) 4.9x 3.5x
Total leverage (excl. ABS) 5.8x 4.1x
Contact:
T: +52 55 4162 8270
About Unifin UNIFIN is a non-regulated Mexican leasing company, operating as a non-banking financial services company, specializing in three main business lines: operating leasing, factoring and auto and other lending. Through UNIFIN’s leasing business line, its core business line, the Company offers operating leases for all types of equipment and machinery, various types of transportation vehicles (including cars, trucks, helicopters, airplanes and other vessels) and other assets in a variety of industries. Through its factoring business line, UNIFIN provides liquidity and financing solutions to its customers by purchasing or discounting accounts receivables and by providing vendor financing. UNIFIN’s auto loans and other lending business line is focused on financing the acquisition of new and used vehicles, while the other lending portion of this business line includes financing working capital needs and the acquisition of other capital assets.
Disclaimer This document may contain certain forward-looking statements. These statements are non-historical facts, and they are based on the current vision of the Management of Unifin Financiera, S.A.B. de C.V., for future economic circumstances, the conditions of the industry, the performance of the Company and its financial results. The terms "anticipated", "believe", "estimate", "expect", "plan" and other similar terms related to the Company, are solely intended to identify estimates or predictions. The statements relating to the declaration or the payment of dividends, the implementation of the main operational and financial strategies and plans of investment of equity, the direction of future operations and the factors or trends that affect the financial condition, the liquidity or the operating results of the Company are examples of such statements. Such statements reflect the current expectations of the management and are subject to various risks and uncertainties. There is no guarantee that the expected events, trends or results will occur. The statements are based on several suppositions and factors, including economic general conditions and market conditions, industry conditions and various factors of operation. Any change in such suppositions or factors may cause the actual results to differ from expectations.