CEMBRA MONEY BANK AG Cembra - a leading player in financing solutions and services in Switzerland
Mirabaud Swiss Equity Forum Geneva, 16 May 2024
Key messages
Focus on strategy execution
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Solid results in 2023 and on track to deliver on strategy and mid-term targets by 2026
Cembra's DNA impact: robust loss performance, pricing and cost discipline, diversified funding mix
Personal loans and auto leasing businesses focused on profitable growth, card migration programme successfully concluded and BNPL business developed into a scalable platform poised for growth in payments
Organisation simplified with two business lines, Lending and Payments, to increase customer focus, leverage customer base and drive efficiency
2023 and 2024 challenging driven by temporary reduction of net interest margin, continued normalisation of loss performance and partial delays in the roll-out of the new core banking platform
On track to deliver cost/income ratio of <39% by 2026, with savings from strategic programmes starting in 2024, supported by leveraging the BNPL service delivery platform
Mid-term targets confirmed1 - attractive and growing dividend
1 see Outlook p 25
2 | May 2024 | Investor presentation |
Agenda
1. Cembra at a glance
2. Business performance
3. Strategy execution and outlook
Appendix
3 | May 2024 | Investor presentation |
Cembra at a glance
Cembra at a glance
A leading provider of financing solutions and services in Switzerland
Who we are
- A leading independent consumer finance specialist, serving >2 million customers in Switzerland
- Strong positions in personal loans, auto loans & leasing, credit cards and BNPL1
- Resilient business model in all economic environments, with NPL2 consistently below 1%
- Successful integration of 4 acquisitions (EFL, Swissbilling, cashgate, Byjuno)
- Diverse workforce of >900 employees with more than 40 nationalities
- Continuous dividend payouts, with average payout ratio of 69% since the IPO
- Strong ESG performance as affirmed by leading ratings (AAA by MSCI ESG, Low ESG Risk by Sustainalytics)
- Standard and Poor's credit rating A-/A-2, stable outlook
- IPO in 2013, listed on Swiss Stock Exchange
1 Buy now pay later 2 Non-performing loans
4 | May 2024 | Investor presentation |
Key figures
Net revenues FY 2023 (CHF)
10%
32%
31%
34% 0.5bn
24% | |||
Personal loans | Credit cards | ||
Auto | BNPL and other | ||
FY 2023 results (US GAAP)
- Total assets CHF 8.0bn
- Competitive loss ratio (0.8%) and cost/income ratio (50.9%)
- Return on equity 12.5%
- Tier 1 capital ratio 17.2%
- Market cap ~CHF 2.1bn (May 2024)
Cembra at a glance
Market positions
Serving >2 million customers across the business lines Lending and Payments
Lending
Personal loans: 38% market share | Auto business: 20% market share | |||
31 December 2023, personal loans market | 31 December 2023, leasing receivables | |||
Bank- | ||||
Bank-now | now | |||
Cembra | Migros | Captive | ||
Bank | Cembra | |||
Other |
Leader in personal loans | Strong independent player | ||
• 9 branches all over Switzerland | • Strong independent player - no | ||
• | Diversified distribution | brand concentration | |
channels: branches, online, | • Partnerships with about 3,700 | ||
independent agents/partners | dealers | ||
• Premium pricing supported by | • Focus on used cars: ~29% new | ||
superior personalised service | and ~71% used cars in portfolio | ||
• | Dual brand positioning | • Dedicated field sales force with | |
(Cembra and cashgate) | four support centres |
Payment
Credit cards: 12% market share | BNPL: 30-40% market share | |
December 2023, credit cards issued | 2023 (own estimates) |
Swisscard | Cembra | |
Viseca | ||
Cembra | availabill | |
Cornèr Bank | ||
Bobzero | ||
Postfinance | ||
MF Group | ||
UBS | ||
Klarna | ||
Attractive portfolio of 1m cards | Growth segment Buy now pay later | ||
• High customer value leading | • Buy now pay later (BNPL): purchase | ||
to frequent card usage | by invoice (online & offline) and | ||
• 9% market share in | invoice financing | ||
transaction volumes | • Strong BNPL market growth | ||
• 16% market share in | expected | ||
contactless payments | • 4.8m (+92%) invoices processed | ||
• Mix of co-branding card partner- | (thereof 3.9m BNPL) | ||
ships and own card offerings |
5 | May 2024 | Investor presentation |
Cembra at a glance
Long-term risk performance
High quality of assets - loss performance resilient through economic cycles
Loss rate | NPL and delinquencies1 |
Reported | 3% | ||||||||||||||||||||||||
Adjusted for one-off | 30+ days past due | ||||||||||||||||||||||||
2% | |||||||||||||||||||||||||
1.0 | 1.1 | 0.8 | 0.9 | 0.9 | 0.8 | 0.8 | 1% | Non-performing loans (NPL) | |||||||||||||||||
0.6 | 0.6 | ||||||||||||||||||||||||
0% | 08-Dec | 09-Dec | 10-Dec | 11-Dec | 12-Dec | 13-Dec | 14-Dec | 15-Dec | 16-Dec | 17-Dec | 18-Dec | 19-Dec | 20-Dec | 21-Dec | 22-Dec | 23-Dec | |||||||||
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | Jun'07 | ||||||||||||||||||
Risk management characteristics
Write-off performance | Credit grades2 |
- Continuous focus on portfolio trends and loss mitigation measures
- Proven resilience of portfolios through economic cycles driven by the flexibility to timely adapt the risk strategies where and when needed
- Well-diversifiedportfolios contributing to limited credit losses
- Cembra expects a temporarily slightly more adverse Swiss macro economic environment, and the loss rate to be in line with the long- term historical trend
By year of origination for Bank Ploans and Auto products
6% | 100% | ||||||||
5% | 2007 | 2015 | 80% | ||||||
2008 | 2016 | ||||||||
4% | 2009 | 2017 | 60% | ||||||
2010 | 2018 | ||||||||
3% | |||||||||
2011 | 2019 | 40% | |||||||
2% | |||||||||
2012 | 2020 | ||||||||
1% | 2013 | 2021 | 20% | ||||||
Months since origination | |||||||||
0% | 2014 | 2022 | 0% | ||||||
0 | 10 | 20 | 30 | 40 | 50 | 60 |
5% | 4% | 4% | CR1 | |||||||||
14% | 13% | 14% | ||||||||||
CR2 | ||||||||||||
29% | 30% | |||||||||||
30% | CR3 | |||||||||||
CR4&5 | ||||||||||||
53% | 53% | 52% | ||||||||||
2013 | 2022 | 2023 |
1 Non-performing loans (NPL) ratio is defined as the ratio of non-accrual financing receivables (at period-end) divided by financing receivables. The increase of NPL ratio from June 2019 is related to the synchronisation of write-off and collection procedures implemented in June 2019| 2 Consumer Ratings (CR) reflect associated probabilities of default for material Bank portfolios
6 | May 2024 | Investor presentation |
Cembra at a glance
Sustainability
Strong external ESG recognition, and commitment to further improve
Sustainability performance
• Reduced Scope 1+2 emissions intensity | ||
E | significantly since 2014 | |
• 100% of electric power from renewable | ||
hydro sources | ||
• Opportunity financing electric vehicles | ||
• NPS of 211 and providing loans under some of | ||
S | the strictest consumer finance laws in Europe | |
• Diverse workforce with >40 nationalities | ||
• GPTW trust index of 71%2 and certified equal | ||
pay for equal work | ||
• Strong governance structure since the IPO3 | ||
G | • Sustainability linked to variable executive | |
compensation since FY 2020 | ||
• Sustainability committee chaired by CEO | ||
Selected targets
Reduce Scope 1+2 carbon emissions by 75% by 2025 (basis: 2019)
Customer net promoter score of at least +301
Employee GPTW2 trust index of at least 70%
Independent limited assurance of Sustainability Reports (since FY 2021)
External recognition
Low ESG risk
Top 8% (score 16.1) among >200 consumer finance peers, Oct 2023
Top 10%
in diversified financial services (Score 45), September 2023
AAA
Rated 1st among listed consumer finance worldwide, May 2023
Inclusion
in the 2023 Bloomberg Gender Equality index as one of 11 Swiss companies, January 2023
1 Net promoter score (from continued measurement) on a scale -100 to 100, FY 2023 | 2 Great Place to Work.org, result for 2022 | 3 ISS Governance Quality Score of 1 on a scale from 1 to 10, January 2024
7 | May 2024 | Investor presentation |
Cembra at a glance
Dividends
About CHF 1.2 billion dividends paid out since the IPO in 2013
Dividends
CHF per share | Extraordinary dividend | ||||||||||
from excess capital | |||||||||||
4.45 | |||||||||||
3.75 | 3.75 | 3.75 | 3.85 | 3.95 | 4.00 | ||||||
3.55 | |||||||||||
3.35 | |||||||||||
3.10 | |||||||||||
2.85 |
- 69% average payout ratio since the IPO
- Dividend for 2024 of at least CHF 4.00
64 | 66 | 66 | 68 | 69 | 69 | 68 | 72 | 70 | 68 | 74 | Pay-out | • | Tier 1 capital ratio target 17%1 | |
ratio as % | ||||||||||||||
• S&P rating of A- since the IPO | ||||||||||||||
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
1 Tier 1 capital ratio target 18% until June 2019, and 2019 target range of 16 - 17% due to acquisition of cashgate
8 | May 2024 | Investor presentation |
Agenda
1. Cembra at a glance
2. Business performance
3. Strategy execution and outlook
Appendix
9 | May 2024 | Investor presentation |
Business performance
FY 2023 performance
Continued solid business performance
Highlights
• Net income of CHF 158.0 million (-7%); |
H2 2023: +5% year on year |
• +3% net financing receivables |
• +1% net revenues, with fees +10% due |
to BNPL |
• Stable cost/income ratio of 50.9%1 |
• Continued robust loss performance, with |
loss rate at 0.8% |
• ROE at 12.5%, and strong Tier 1 capital |
Net income
in CHF m
-7%
169.3158.0
20222023
Loss rate
Mid-term target ≤ 1%
Net financing receivables
in CHF m
+3%
6,520 6,687
31.12.2022 31.12.2023
Return on equity
Target ROE of 13-14% for 2023
Net revenues
in CHF m
Net interest income
Commission and fees
+1% | ||||
515.7 | ||||
508.9 | ||||
152.7 | 168.5 | +10% | ||
356.2 | 347.2 | -3% |
20222023
Tier 1 capital ratio
Mid-term target of at least 17%
ratio of 17.2% |
• Dividend increased to CHF 4.00 |
(FY 2022 CHF 3.95) |
0.6%
1%
0.8%
13-14%
13.7% 12.5%
17%
17.8%17.2%
1 FY 2022: cost/income ratio of 50.6%
10 | May 2024 | Investor presentation |
20222023
20222023
31.12.2022 31.12.2023
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Disclaimer
Cembra Money Bank AG published this content on 16 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 May 2024 05:09:02 UTC.
