AlphaCredit · 2018. 4. 23. · Factoring loans 2.6% Leasing loans 1.1% PDL - Mexico 81.7% PDL - Colombia 7.8% ACH loans 3.8% Gross portfolio: MXN$6,083 mm Source: Alpha Holding’s

04 | 2018

AlphaCredit

Private and Confidential – Do not copy or distribute

Contact:

+52-(55)-5292-7511

[email protected]

www.alphacredit.mx

Earnings Release – 4Q 2017

mailto:[email protected]

http://www.alphacredit.mx/

Private and Confidential Do not copy or distribute

AlphaCredit’s business lines

2011 2012 2013 2014 2015 2016 2017

2

Description

Alpha Holding, S.A. de C.V (“AlphaCredit”, “AC” or the “Company”) is a leading specialty

finance company headquartered in Mexico City that offers (A) consumer loans through

(i) Payroll Deduction Loans (“PDLs”) in Mexico and Colombia and (ii) Automated

Clearing-House Debit Loans (“ACH”) in Mexico, and (B) financing solutions to small and

medium-sized companies (“SMEs”) in Mexico through (i) Factoring and (ii) Leasing

services

AlphaCredit began operations in 2011 by providing PDLs to federal and state

government employees in Mexico

In July 2015 AC expanded into the Colombian market and disbursed its first PDL at the

beginning of 2016. The Colombian operations are supported by strong experience,

know-how and expertise developed in Mexico alongside a strong local senior

management team and regulatory framework

In 2016, the Company expanded its consumer portfolio by offering ACH loans to

Mexican pensioners and retirees

Also in 2016 the Company entered into the Mexican SMEs sector by providing Factoring

and Leasing services

Gross portfolio evolution (MXN$ mm)

Geographical presence

Consumer loans93.3%

SMEs loans6.7%

2.6%Factoring loans

1.1%Leasing loans

81.7%PDL - Mexico

7.8%PDL - Colombia

3.8%ACH loans

Gross portfolio: MXN$6,083 mm

Source: Alpha Holding’s un-audited financial information as of December 2017; 1 Includes Structured loans and Working capital loans to AC´s main PDLs brokers that use funds to originate PDLs for AC (the Company does not offer these products anymore)

3.0%Other loans1

CAGR ‘14 – ’17 = 70.4%

AlphaCredit’s consumer lending geographical footprint is managed through:

• +180 branches in Mexico and +10 branches in Colombia

• over 2,300 sales force agents in Mexico and 650 in Colombia

Headquarters

AlphaCredit’s SME lending provides two major financial solutions to SMEs in different regions in Mexico:

• operating and financial leases, and

• A/R financing (direct factoring) and supply chain financing (reverse factoring)

6,083

Company overview


Dec-17

0.0

400.0

800.0

1,200.0

1,600.0

2,000.0

2,400.0

2,800.0

3,200.0

3,600.0

4,000.0

4,400.0

4,800.0

5,200.0

5,600.0

6,000.0

6,400.0

6,800.0

7,200.0

Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17

3

Source: Alpha Holding’s un-audited financial information as of December 2017

AlphaCredit stand-alone total cumulative disbursed portfolio (MXN$ mm)

AlphaCredit disburses its first PDL loan

AlphaCredit issues MXN$400 mm PDLs portfolio

securitization in the Mexican Stock Exchange (BMV)

Acquisition of:

AlphaCredit’s expansion to Colombia

Acquisition of:

AlphaCredit introduces ACH debit loans

AlphaCredit begins Factoring & Leasing operations

Acquisition of:

AlphaCredit timeline

Alpha Holding issuesUSD $300 mm International bond due 2022

AlphaCredit has raised more than US$800 mm in

debt with local and international financial

institutions and the public markets

Interest income

Gross loans

Total assets

Book value

2014 – 2017 CAGR

65.1%

70.4%

106.5%

67.4%


Consumer lending portfolio breakdown as of December 2017

4

27%

10%

8%6%

49%

CDMX

Sinaloa

Chiapas

Tabasco

Others (28)

PDL Mexico portfolio by state PDL Mexico portfolio by sector

PDL Colombia portfolio by region PDL Colombia portfolio by sector

PDL Mexico

PDL Colombia

✓ Number of loans outstanding: +198,000✓ Average loan size (MXN$): ~28,000✓ Average original term (months): 42✓ Average annual interest rate (%): 43.8%

✓ Product highlights:

✓ Represented 85% of revenue for YE17

✓ 70% of 2017 origination came from this product

✓ Represented 82% of gross portfolio for YE17

✓ 4.2% of NPL portfolio

✓ Diversified with more than 300 government agreement across the 32 states in México




✓ 16% of 2017 origination came from this product

✓ Represented 8% of total portfolio for YE17


✓ Diversified with more than 100 government agreement across the 6 regions in Colombia

57% 20%

11%

9%

3%

Federal

Health

Education

State

Others

54%

15%

11%

8%

12%Centro

Antioquia

Costa

Occidente

Others (2)

67%

14%

11%

8%

Pensioners

Education

State

Others (7)



Consumer lending portfolio breakdown as of December 2017 (cont’d)

5

ACH portfolio by state ACH portfolio by sector

PDL Colombia portfolio growth ACH portfolio growth

Automated Clearing-House Debit Loans

Consumer lending portfolio evolution (MXN$ mm)

PDL Mexico portfolio growth

966 1,374

4,192

4,967

2014 2015 2016 2017


21%

9%

8%

7%6%

49%

Sonora

CDMX

Coahuila

Veracruz

Sinaloa

Others (27)



✓ 6% of total origination came from this product



✓ Diversified with more than 10 government agreement across the 32 states in México

119

476

2014 2015 2016 2017

99

232

2014 2015 2016 2017

51%48%

1%

Retiree

Pensioner

Other



SME lending portfolio breakdown as of December 2017

6

Factoring product diversification Factoring portfolio growth

Leasing exposure by asset type Leasing portfolio growth

Factoring

Leasing

✓ Number of invoices outstanding: +850✓ Average loan size (MXN): ~145,000✓ Average original term (days): 75✓ Average annual interest rate (%): 19.3%

✓ Number of transactions outstanding: +50✓ Average loan size (MXN’000): ~1,200✓ Average original term (months): 38✓ Average annual interest rate (%): 21.5%

89%

11%

AR Factoring

Supply ChainFactoring

48%

28%

24% M&E

Auto

OfficeEquipment


✓ Represented 0.9% of revenue for YE17



✓ 0% of NPL portfolio


✓ Represented 0.8% of revenue for YE17



✓ 0% of NPL portfolio 3

64

2014 2015 2016 2017

9

156

2014 2015 2016 2017



Debt Profile

7

Type of Debt Fixed rate vs Floating rate

2018 2019 2020 2021 2022 - OlderInternational Notes Bank Credit Lines Asset Securitization International Funds Others

Total Debt - Maturity Profile

8,020

384453

1,008

2,603

Source: Alpha Holding’s un-audited financial information as of December 2017; 1 Refers to principal outstanding balance; 2 76% of the Company’s Floating Rate has been hedged via Interest Rate derivatives

Secured vs Unsecured

47%

23%

4%

15%

11%

InternationalNotes

Bank CreditLines

AssetSecuritization

InternationalFunds

OthersTotal = MXN$12,468 mm

67%

33% Unsecured

Secured

95%

5%

Fixed Rate

Floating Rate2

1


Income Statement by business unit

8

(MXN$ millions)Consumer

lending MexicoConsumer

lending ColombiaSME

Lending 2017Corporate

adjustments2017(adj)

Interest income and fees 1,951 99 38 2,087 0 2,087

Interest expense and fees (1,117) (8) (5) (1,130) 36 (1,094)

Financial margin 834 91 32 957 36 994

Allowance for loan losses (73) (3) (2) (78) 0 (78)

Financial margin adjusted for credit risks 761 88 31 880 36 916

Administrative expenses (694) (50) (25) (768) 0 (768)

Other expenses, net 39 (18) 3 24 0 24

Income before income taxes 106 20 9 135 36 171

Income tax benefit (expense) (29) (4) (4) (37) (10) (47)

Non-controlling interest 18 0 0 18 0 18

Net Income 94 16 5 115 26 142

January to December 2017

1

2

3

Source: Alpha Holding’s un-audited financial information as of December 2017; 1 Refers to adjustments derived from one time expenses or negative carry 2 Negative carry corresponding to the additional debt raised and not deployed during 2017 3 Based on 2017 effective tax rate


463659

1,049

2,087

2014 2015 2016 2017

Interest Income Ave. Interest income rate

9

Source: Alpha Holding’s un-audited financial information; 1 Includes Structured and Working Capital loans. AC does not commercialize these products anymore; 2 Includes opening fees charged in our consumer lending and SME lending business units 3 Interest income divided by the average gross loan portfolio

2014 2015 2016 2017

CAGR ‘14 – ’17 = 70.4%

PDL

Colombia

ACH

F&L

Others 1

Net Income (MXN$ mm)

Financial highlights

Gross loans (MXN$ mm)

Interest Income2 (MXN$ mm)

56 53

115 142

2014 2015 2016 2017 2017adj.

57.3%

1,2301,694

4,676

6,083

CAGR ‘14 – ’17 = 65.1%

48.9%45.1%

32.9%

38.8%

3

NPLs (MXN$ mm)

2436

171

228

2014 2015 2016 2017

NPL NPL Ratio

2.0%2.1%

3.7%

3.7%

658


Credit Highlights

10

40.0%

67.8%

43.1%37.9%

2014 2015 2016 2017

Strong Capitalization1 Coverage Ratio3Net Financial Leverage2

Efficiency Ratio %4 ROAE6ROAA5

Source: Alpha Holding’s un-audited financial information; 1 Calculated as Total Shareholders’ Equity divided by Gross Loan Portfolio; 2 Calculated as Net Debt divided by Total Shareholders’ Equity; 3 Calculated as Allowance forLoan Losses divided by Non-Performing Loans; 4 Calculated as administrative and fee expense for the period divided by de difference between Interest income and fees, and interest expense for the period; 5 Calculated as netincome of the period divided by average total assets; 6 Calculated as net income of the period divided by average stockholders’ equity

1.4x 1.3x

2.8x3.1x

2014 2015 2016 2017

101.2%

127.3% 128.9%120.7%

2014 2015 2016 2017

67.6%

48.3%

82.7% 79.5%

2014 2015 2016 2017adj

4.0%

0.7%1.1%

2014 2015 2016 2017adj

17.0%

3.4%

6.6%

2014 2015 2016 2017adj

80.2%21.0%

+320bps+40bps


Income Statement

11

(MXN$ millions) 2016 2017 2017 (adj)%Var vs

2017 (adj)

Interest income and fees 1,049 2,087 2,087 99.1%

Interest expense and fees (535) (1,130) (1,094) 104.5%

Financial margin 514 957 994 93.4%

Allowance for loan losses (107) (78) (78) (27.1%)

Financial margin adjusted for credit risks 407 880 916 124.9%

Administrative expenses (417) (768) (768) 84.2%

Other expenses, net 12 24 24 99.6%

Income before income taxes 2 135 171 8,131.6%

Income tax benefit (expense) 29 (37) (47) (266.9%)

Non-controlling interest 21 18 18 (17.7%)

Net Income 53 115 142 167.5%



Balance Sheet

12

(MXN$ millions) 2016 2017 %Var

Cash, cash equivalents and restricted cash 507 4,920 870.4%

Performing loan portfolio:

Personal loans 4,241 5,447 28.4%

Loans to other entities 261 345 32.2%

Non-performing loan portfolio:

Personal loans 171 228 32.9%

Total loan portfolio 4,673 6,019 28.8%

Allowance for loan losses (221) (275) 24.4%

Net loan portfolio 4,452 5,745 29.0%

Other assets 5,060 6,205 22.6%

Total assets 10,019 16,869 69.1%

Loans from banks and other entities 6,160 12,286 99.4%

Sundry creditors and other payables 843 1,626 92.8%

Taxes 1,001 650 (35.0%)

Total liabilities 8,004 14,562 82.9%

Total stockholders’ equity 2,015 2,307 14.5%

Total liabilities and stockholders’ equity 10,019 16,869 69.1%



Key ratios

13

Source: Alpha Holding’s un-audited financial information as of December 2017; 1 Calculated as financial margin of the period divided by the total gross loan portfolio at the end of each period; 2 Calculated as net income of the period divided by average total assets; 3 Calculated as net income of the period divided by average stockholders’ equity 4 Calculated as loans from banks and other entities net of cash at the end of the period divided by stockholders’ equity at the end of the period; 5 Calculated as interest income of the period divided by the average gross loan portfolio; 6 Calculated as interest expense divided by average bank loan balances; 7 Calculated as administrative and fee expense for the period divided by de difference between Interest income and fees, and interest expense for the period; 8 Calculated as total stockholders’ equity at the end of the period divided by total gross loan portfolio at the end of the period

(MXN$ millions) 2016 2017 2017 (adj)Var vs

2017 (adj)

Financial margin1 11.0% 15.7% 16.3% +530bps

ROAA: Return on average total assets2 0.7% 0.9% 1.1% +40bps

ROAE: Return on average stockholders’ equity3 3.4% 5.3% 6.6% +320bps

Net debt to equity ratio4 2.8x 3.1x 3.1x 10.7%

Average interest income rate (total portfolio)5 32.9% 38.8% 38.8% +590bps

Average cost of funds6 11.1% 11.1% 10.7% -40bps

Efficiency ratio7 82.7% 82.2% 79.5% -320bps

Capitalization ratio8 43.1% 37.9% 37.9% -520bps


Disclaimer

14

The material that follows is a confidential presentation of general background information about Alpha Holding, S.A. de C.V. (“AlphaCredit”, “AC” or “theCompany”), and its subsidiaries as of the date of the presentation. It has been prepared solely for informational purposes and is not to be construed as asolicitation or an offer to buy or sell any securities and should not be treated as giving investment advice to potential investors. The information containedherein is in summary form and does not purport to be complete. No representations or warranties, express or implied, are made concerning, and no relianceshould be placed on, the accuracy, fairness, or completeness of this information. Neither AlphaCredit nor any of its affiliates accepts any responsibilitywhatsoever for any loss or damage arising from any information presented or contained in this presentation. The information presented or contained in thispresentation is current as of the date hereof and is subject to change without notice and its accuracy is not guaranteed. Neither AlphaCredit nor any of itsaffiliates make any undertaking to update any such information subsequent to the date hereof.This confidential presentation contains forward-looking statements and both operating and financial figures relating to AlphaCredit that reflect the currentviews and/or expectations of AlphaCredit and its management with respect to its performance, business and future events. Forward-looking statementsinclude, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain wordslike “believe”, “forecast”, “estimate”, “anticipate”, “expect”, “envisage”, “intend”, “plan”, “project”, “target” or any other words or phrases of similarmeaning. Such statements are subject to a number of risks, uncertainties and assumptions. Forward-looking statements are not guarantees of futureperformance and our actual results or other developments may differ materially from the expectations expressed in the forward-looking statements. As forforward-looking statements that relate to future financial results and other projections, actual results may be different due to the inherent uncertainty ofestimates, forecasts and projections. Because of these uncertainties, potential investors should not rely on these forward-looking statements. NeitherAlphaCredit nor any of its affiliates, directors, officers, agents or employees, nor any of the shareholders shall be liable, in any event, before any third party(including investors) for any investment or business decision made or action taken in reliance on the information and statements contained in thispresentation or for any consequential, special or similar damages.Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the U.S. Securities Act of 1933, asamended. No action has been taken in any jurisdiction to permit a public offering or distribution of any securities. Any offering of securities to be made willbe made solely by means of a confidential offering memorandum. Such confidential offering memorandum will contain detailed information aboutAlphaCredit, and its subsidiaries, its business and financial results, as well as its financial statements. This presentation does not constitute an offer, orinvitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basisof any contract or commitment whatsoever. This document has not been approved by the U.S. Securities and Exchange Commission, nor any othercompetent regulatory or supervisory authority.Statements about market share and other information relating to the consumer finance industry in Mexico and Colombia includes, among others,statements pertaining to payroll loans, credit cards and insurance premium finance which are derived from internal surveys, third-party sources, industrypublications and publicly available information. Notwithstanding any investigation that AlphaCredit or any affiliate may have conducted with respect to themarket share, market size or similar data provided by third parties, assume no responsibility for the accuracy or completeness of any such information.This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part withoutAlphaCredit’s prior written consent.

Private and Confidential – Do not copy or distribute

Documents

AlphaCredit · 2018. 4. 23. · Factoring loans 2.6% Leasing loans 1.1% PDL - Mexico 81.7% PDL - Colombia 7.8% ACH loans 3.8% Gross portfolio: MXN$6,083 mm Source: Alpha Holding’s