mogo
Interim report (Q1 and Q3)

CORRECTION: Eleving Group (former Mogo Finance) reports unaudited results for the three months ended 31 March 2022

All-time best quarterly performance

CORRECTION: Adjusted sequence of press release bullet-points.

Operational and Strategic Highlights

• Substantial increase in performance levels (Key Performance Indicators) during the period:
  • adjusted revenue up by 43.5% compared to Q1 2021, surpassing EUR 45.5 mln in Q1 2022;
  • adjusted EBITDA up by 27.8% compared to Q1 2021, reaching EUR 17.1 mln in Q1 2022;
  • adjusted net profit before FX up by 59.5% compared to Q1 2021, hitting the EUR 5.9 mln mark for the period.
• Continued diversification of the business and a balanced revenue stream from the three core business lines:
• flexible lease and subscription-based products contributed EUR 10.5 mln to the Q1 2022 revenue—up by 147.7% compared to Q1 2021 and up by 16.8% compared to Q4 2021. Driven by the continuous growth of motorcycle-taxi financing in Kenya and Uganda and successful scale-up of rental and subscription-based products in the Baltics;
• lease and leaseback product revenue at EUR 15.2 mln, up by 25.9% compared to Q1 2021 and up by 7.3% compared to Q4 2021, demonstrating a stable upward trajectory and bouncing back after the slowdown in 2020 caused by the COVID-19 pandemic and rationalization of some markets;
• consumer lending products generated EUR 17.8 mln in revenue—an increase of 42.4% compared to Q1 2021 but a decrease of 10.3% compared to Q4 2021. The decrease is directly linked to the suspension of issuances and portfolio deterioration in Ukraine. Other consumer markets demonstrated a steady and stable performance.
• Vehicle and Consumer Financing Portfolio has reached EUR 259.9 mln—a record-high for the company and a 41.6% increase compared to Q1 2021.
• The subscription-based product, launched in Q4 2021, has successfully onboarded its first customers, and the fleet value surpassed EUR 1 mln, with a utilization ratio above 80%.  Half of the onboarded customers are SMEs, while the other half is comprised of private individuals.
• Special measures have been taken in Belarus and Ukraine to cope with the direct and indirect warfare effects:
• issuances in both countries have been halted. In March, new early repayment initiatives were implemented in Belarus, which resulted in all-time-high collections. In the same month, a significant drop in collections was observed in Ukraine, however, meaningful improvements were seen already in the following month as cash collected in April exceeded March’s figures more than twofold. Additionally, Belarus operations have focused on liability settlement towards the Group, while cross-border payments and currency conversion has been suspended in Ukraine;
• the existing staff has been reorganized and downsized in both countries, retaining the core focus on debt collection activities. Currently, Eleving Group’s strategy in both markets is to decrease portfolio exposure while maintaining an efficient cost base structure.

Financial Highlights and Progress

·       Record profitability as evidenced by:

o   record-high EBITDA—EUR 17.1 mln (3M 2021: EUR 12.5 mln);

o   Net Profit before FX—EUR 5.9 mln (3M 2021: EUR 2.8 mln);

o   Net Profit after FX—EUR 4.3 mln (3M 2021: EUR 3.0 mln).

·       Record-high portfolio—EUR 259.9 mln, a EUR 14.7 mln increase QOQ; Eleving Vehicle Finance accounted for EUR 197.7 mln, Eleving Consumer Finance—for EUR 62.2 mln, respectively.

·       Sufficient capitalization with improving balance sheet structure:

o   the capitalization ratio stood high at 21.0% (31 December 2021: 20.7%), providing an excellent and stable headroom for Eurobond covenants;

o   on 7 March 2022, Eleving Group’s subordinated bonds (XS2427362491) were admitted to trading on the Nasdaq Baltic First North Market;

o   receivable from the sale of Longo Group has been fully repaid as of the end of 31 March 2022.

Modestas Sudnius, CEO of Eleving Group, commented: “In the first quarter of 2022, Eleving Group has been successful both operationally and financially. We managed to achieve the planned growth and profitability targets, which testifies to the quality of our portfolio and the effectiveness of the company’s operations and chosen strategy. During the first quarter of 2022, we continued to demonstrate strong results across our markets and business lines. It was an exceptional quarter for our most developed markets—the Baltic States and the Caucasus, and consumer finance businesses in Albania and North Macedonia. In addition, rapid growth was still observed in Kenya and Uganda, where Eleving Group has become an indispensable partner for unbanked customers seeking mobility solutions to increase their income. Despite the challenges, Eleving Group continued to implement new projects, though on a smaller scale. Primero, a premium car lease product, has been successfully launched in Armenia. A fleet of new cars is gradually growing in Latvia to support the development of Renti Plus, a car subscription service. A lending license has been received in Finland, with plans to launch vehicle finance operations in the second quarter of 2022.”

Maris Kreics, CFO of Eleving Group: “The first quarter of 2022 shows stable financial performance despite the strong headwinds caused by the geopolitical situation in Eastern Europe. We have managed to achieve one of the highest quarterly EBITDA results in the company's history and maintain stable net profitability. We have further improved our balance sheet during the first quarter by collecting payments from previously sold businesses and fully settling outstanding receivables for Longo business and Mogo Kazakhstan. The received funds were further redeployed into the company's portfolio, thus ensuring further growth. Meanwhile, Eleving Group has successfully listed its subordinated bonds on Nasdaq First North, and part of the Group’s shareholder loans have already been replaced with subordinated bonds. Eleving Group is paying close attention to the situation in Ukraine and Belarus while taking deliberate actions to reduce the exposure of the company’s portfolio in the respective markets. Despite the complex situation and halted loan issuances in both markets, inbound cash flow and portfolio performance in Belarus remains excellent, with profitable monthly operations. Additionally, Ukraine shows strong signs of improvement, with April cash flows already on a better trajectory than in March. Considering global inflationary pressure on goods and services, we can still observe a very high demand for our mobility and consumer products. We have a strong track record proving that Eleving Group's business model can quickly adapt to market changes, and the chosen strategy helps the company to overcome any short-term turbulences. Furthermore, currently we are not observing fundamental changes in our customers’ credit discipline, and the portfolio quality remains intact.”

The full unaudited report for the three months ended 31 March 2022 is available under: https://eleving.com/investors/

Conference Call:

A conference call in English with the Group's management team to discuss the results is scheduled for 17 May 2022 at 15:00 CET.

Please register: http://emea.directeventreg.com/registration/5748666

Contact:

Eleving Group

Maris Kreics, Chief Financial Officer (CFO)

Email: maris.kreics@eleving.com

About Eleving Group

Eleving Group comprises a number of financial technology companies with a global presence. The Group operates in the vehicle and consumer finance segments in 3 continents, providing financial inclusion and disruptively changing financial service industries in its countries of operation. Founded in 2012 in Latvia, the Group has revolutionized the way people purchase cars. Having expanded across the Baltics within its first year in business, the Group continued expansion in the following years, servicing a total of 14 active markets. With its headquarters in Latvia, the Group operates in the Baltics, Central, Eastern, and South-Eastern Europe, Caucasus, Central Asia, and Eastern Africa. For two consecutive years (2020, 2021), the Group has appeared on the Financial Times list of Europe’s 1000 fastest growing companies.

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