Upload
phungque
View
217
Download
1
Embed Size (px)
Citation preview
Not a bank. By design.
AGM Presentation
June 2016
Forward-Looking Information: This document contains forward looking statements that relate to our current expectations and views of future events. In some cases, these forward-looking statements can be identified by words or phrases such as “may”, “might”, “will”, expect”, “anticipate”, “estimate”, “intend”, “plan”, “indicate”, “seek”, “believe”, “predict” or “likely”, or the negative of these terms, or other similar expressions intended to identify forward-looking statements. The Company has based these forward-looking statements on its current expectations and projections about future events and financial trends that it believes might affect its financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, among other things, statements relating to: the Company’s expectations regarding its revenue, expenses and operations; adjusted EBITDA; 2016 priorities; the Company’s plans for and timing of expansion of its solution and services; the Company’s expectations with respect to advancement of its product offering; and estimated lifetime value per customer. Forward-looking statements are based on certain assumptions and analyses made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate, and are subject to risks and uncertainties. Although we believe that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and we cannot assure that actual results will be consistent with these forward-looking statements. Given these risks, uncertainties and assumptions, prospective purchasers of Common Shares should not place undue reliance on these forward-looking statements. Whether actual results, performance or achievements will conform to our expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors, including those in the Management’s Discussion and Analysis for the quarter ended March 31, 2016 under the heading ‘‘Risk Factors’’ therein available under our profile on SEDAR (www.sedar.com). If any of these risks or uncertainties materialize, or if assumptions underlying the forward-looking statements prove incorrect, actual results might vary materially from those anticipated in those forward-looking statements. Information contained in forward-looking statements in this document is provided as of the date of the MD&A, and we disclaim any obligation to update any forward-looking statements, whether as a result of new information or future events or results, except to the extent required by applicable securities laws. Accordingly, potential investors should not place undue reliance on forward-looking statements or the information contained in those statements.
This document may contain Future Oriented Financial Information (“FOFI”) within the meaning of applicable securities laws. The FOFI has been prepared by our management to provide an outlook of our activities and results and may not be appropriate for other purposes. The FOFI has been prepared based on a number of assumptions including the assumptions discussed above. The actual results of our operations and the resulting financial results may vary from the amounts set forth herein, and such variation may be material. Our management believes that the FOFI has been prepared on a reasonable basis, reflecting management’s best estimates and judgments.
Non-IFRS Measures: This document makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non IFRS financial measures, including gross loans receivable (short-term and long-term), contribution, Adjusted EBITDA , Adjusted net income (loss) and cash provided by (used in) operating activities before investment in loans receivable, to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure and working capital requirements. Please refer to the ‘Management’s Discussion and Analysis for the quarter ended March 31, 2016 which is available on SEDAR (www.sedar.com) for further information or the appendix for a reconciliation of non-IFRS measures we use in this presentation to the comparable IFRS measures.
The securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the United States and, subject to certain exceptions, may not be offered or sold within the United States except in transactions exempt from registration under the U.S. Securities Act and under the securities laws of all applicable states.
This presentation should be read together with our audited financial statements for the financial quarter ended March 31, 2016 and the notes thereto as well as our Management’s Discussion and Analysis for the financial quarter ended March 31, 2015, all of which are available at www.SEDAR.com.
©2016 Mogo Finance Technology Inc. Mogo designs are trademarks of Mogo Finance Technology Inc.
2 / 39Not a bank. By design.
Mogo is a financial technology platform that empowers consumers with simple digital financial solutions.
Not a bank. By design.
ProductPlatform Brand
3 / 39Not a bank. By design.
“Competitive pressure from digital disruptors, both global leaders and smaller financial technology entrants, is increasing and the risk of disintermediation is growing.”
“McKinsey estimates that up to 60% of banks’ retail profits could be lost by 2025 to nimble fintech firms.”
– CIBC Annual Report 2015
– McKinsey 2015 Annual Review of Global Banking
Digitization of banking
“FinTech adoption expected to double within next year.”- EY Fintech adoption index1
1http://www.ey.com/CA/en/Services/Advisory/Advisory-for-Financial-Services/EY-Fintech-Adoption-Index-Canadian-findings
4 / 39Not a bank. By design.
Leading digital platform
1 Revenue run rate is a non-IFRS measure calculated by multiplying the IFRS revenue for the quarter ended March 31, 2016 by four. 2 Subject to certain conditions, see notes to financial statements.
Q1 2016 Revenue Runrate1 of
$50MM+$28.6MM in cash and cash equivalents at end of Q1 2016
$100MM+ invested in
the platform to date
Building a
brand powered
by $50MM+ marketing collaboration with PostMedia2
Innovative
Products
300Team Members
200K+ MogoMembers
5 / 39Not a bank. By design.
p l at f o r m
6 / 39Not a bank. By design.
300 Team members
• Design
• Product
• Credit Risk
• Data & Analytics
• Engineering
• Marketing
Platform - Team
• IT
• Finance
• Legal & Compliance
• HR
• Online Operations
• Collections
• Engagement • Start-up culture • New space
7 / 39Not a bank. By design.
Platform - Technology
100 product & platform team
members
Mobile first approach
Intuitive user experience
Highly scalable cloud based architecture
Real time data/analytics
$100MM+ invested to date
FinTech Platform
Automated fraud/credit decisioning
Integrated customer
acquisition, CRM, collections
API based Agile platform with
weekly releases
8 / 39Not a bank. By design.
T o d ay ’ s p r o d u c t o f f e r i n g
9 / 39Not a bank. By design.
Product - Online lending platform
• 3 minutes to check your rate
• No impact to credit score
• Only full spectrum lender
• Unique Level Up program
• Automated bank verification
• Originated 1MM+ loans
10 / 39Not a bank. By design.
N e w P R O D U C T sc o m i n g s o o n
11 / 39Not a bank. By design.
Product - New disruptive value proposition
Credit score
3 minutes to open an account
Pre-approval for a personal loan
MogoCard (coming soon)
SIGN UP FOR FREE
FREEFREE
Free credit score paid for by
Mogo and provided by Equifax
Canada
Access to credit that helps
consumers get out of debt
sooner
Chequing account alternative that
helps control spending and avoid
fees
12 / 39Not a bank. By design.
Product - Introducing new online account
Coming soon
13 / 39Not a bank. By design.
Product - New mobile app
Coming soon
14 / 39Not a bank. By design.
Product - New MogoCard
Visa® is a registered trademark of Visa Int. Service Association and used under license. Mogo Platinum Prepaid Visa® Cards are owned and issued by Home Trust Company, a TM licensee of Visa Int. and subject to Terms and Conditions. Your MogoCard balance is not insured by the Canada Deposit Insurance Corporation. The MogoCard is only available to MogoAccount holders that have passed identity verification.
Coming soon
15 / 39Not a bank. By design.
Product - Credit Score
16 / 39Not a bank. By design.
Product - Liquid Digital
Coming soon
17 / 39Not a bank. By design.
Product - New MogoMortgage
1References and images related to the Mogo Mortgage are for illustrative purposes and should be considered forward-looking statements. Mogo is not currently a registered mortgage broker or mortgage lender and does not currently offer mortgage brokerage or mortgage loan services. See “Forward-Looking Information”
Coming soon
18 / 39Not a bank. By design.
b r a n d
19 / 39Not a bank. By design.
• $50MM+ three year marketing partnership1
• driving increased brand awareness
• provides significant leverage on marketing spend
• de-risks marketing spend
$50MM+ media partnership driving brand awareness
1Subject to certain conditions, see notes to financial statements.
20 / 39Not a bank. By design.
#FinancesWithBenefits
21 / 39Not a bank. By design.
* source:http://www.blogto.com/city/2016/04/this_toronto_shop_is_actually_the_citys_coolest_bank/
“This Toronto shop is actually the city’s coolest bank*”
22 / 39Not a bank. By design.
“Sex and Snoop. Can the big banks handle this?” — Toronto Star
*
GOOD THRU:
4000
*
4000GOOD THRU:
A D U L T I N G
101
“Sex and Snoop. Can the big banks handle this?” - thestar.com
23 / 39Not a bank. By design.
c a n a d i a n m a r k e t
24 / 39Not a bank. By design.
Equitable G
roup
Laure
ntian B
ank
First N
ational
Canad
ian W
estern
Ban
k
Home Cap
itol G
roup
ING D
irect
National
Bank
Bank o
f Montre
al
Scotia
bank
TDRBC
CIBC
$0.9 $1.5 $1.8 $2.1 $2.3 $3.11
$14.7
$40.8
$54.2
Note: As of May 25, 2016.
1. Based on the Scotiabank acquisition price.
$77.7
$106.2 $117.8
Market Capitalization (in billions)
Paypal
$57.0
Canadian landscape
25 / 39Not a bank. By design.
Members drive value
55K
$3B Assets $10B Assets $19B Assets $40B Assets
16mM2.4mM1.8mM519k266K200k
$216B Assets $1.07T Assets
Westminster Savings: https://www.wscu.com/Personal/AboutUs/ ; Meridian: Meridian 2014 Annual Report ; Vancity: March 3, 2016 Press Release: https://www.vancity.com/lang/fr/AboutVancity/News/MediaReleases/VancityFinancialResults-Mar3-2016/ ; ING Direct: August 2012 Press Release: http://www.ing.com/Newsroom/All-news/Press-releases/PR/ING-to-sell-ING-Direct-Canada-to-Scotiabank.htm National Bank: 2015 Annual Report; RBC: Annual Report 2015
26 / 39Not a bank. By design.
f i n a n c i a l r e s u lt s
27 / 39Not a bank. By design.
Q1 2016 financial highlights
1Long-term loan receivables and Adjusted EBITDA are non_IFRS measures. See appendix for a reconcilliation of these non-IRFS measures.. 3Subject to certain conditions, see notes to financial statements.
Q1 2016 Revenue runrate of
$50MM+loan interest up 273% yr/yr
Strong liquidity position with
$28.6MM in cash and cash equivalents at end of Q1 2016
Total expandable credit facilities2 up to
$250MM
Long-term loan receivables1 increased to
77%of $70MM portfolio
Second consecutive improvement in Adjusted EBITDA1 loss
33%
in Q1 2016 vs Q4 2015
Grew active member base to approximately
204,000up 105% YR/YR
28 / 39Not a bank. By design.
Strong member growth driving revenues
Q1 Q2 Q3
2015
Q4
(in thousands)Quarterly MogoMembers
106% GROWTH
Q1
2016
$11.6
$9.1
$10.3
$12.5
($ in millions)Quarterly Revenue
$12.7
Q1 Q2 Q3
2015
Q4 Q1
2016
39% GROWTH
99K
124K
158K
186K
204K
29 / 39Not a bank. By design.
Long-term loans driving receivable growth
GROSS LOANS RECEIVABLE - SHORT TERM
GROSS LOANS RECEIVABLE - LONG TERM
$70.0
$29.2
Q1Q1
2015 2016
139% GROW
TH
($ in millions)Gross Loans Receivable
Long-term loans represent 77% of gross loans receivableGross loans receivable - short term and gross loans receivable - long term are non-IFRS measures. See appendix for a reconcilliation of these non-IRFS measures.
45%
77%
55% 23%
33.8% 18.9%CHARGE OFF RATE
30 / 39Not a bank. By design.
CUSTOMER SERVICE & OPS
MARKETING
GENERAL & ADMINISTRATION
TECH & DEVELOPMENT
Q1 Q2 Q3 Q4
($ in millions)Quarterly Opex
Model demonstrating operating leverage
2015
16.7%16.6%
18.5%
17.8%
19.3%
20.6%
25.9%
83.6%
26.0%
31.6%
20.7%20.6%
22.6%
25.7%
20.2%
24.3%
17.9%
79.1%85.4%
96.9%
Q1
17.6%
16.1%
18.7%
22.1%
74.5%
2016
31 / 39Not a bank. By design.
Q3Q2
$4.0
$3.5$3.2
Steadily increasing Contribution
2015
$4.2
Q4
$14.9
20152014
$7.6
($ in millions)Annual
($ in millions)Quarterly
Contribution is a non-IFRS measure. See appendix for a reconcilliation.
Q1
34% GROWTH
$4.3
Q1
2016
32 / 39Not a bank. By design.
Q1 Q2 Q3 Q4
2015
(in millions)Quarterly Adjusted EBITDA
1Cash Flow provided by (used in) operating activities before investment in receivables.
$(1.1)
$(1.9)
$(3.2)
$(1.5)
Second consecutive improvement in Adjusted EBITDA
CASH FLOW BEFORE RECEIVABLES1
$(1.0)
Q1
2016
$(3.7) $(4.7) $(6.0) $(4.8)ADJUSTED NET LOSS $(4.4)
$(0.8) $1.8 $(0.8) $(0.0) $(0.6)
33 / 39Not a bank. By design.
34 / 39Not a bank. By design.
a p p e n d i x
35 / 39Not a bank. By design.
(in $000s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Loss before income taxes $(4,264) $(4,684) $(6,803) $(5,596) $(5,653)
Depreciation and amortization 347 362 424 560 445
Stock-based compensation 47 110 396 635 265
Funding interest 626 800 821 1,222 1,439
Corporate interest expense 1,560 1,554 1,569 1,576 1,583
Unrealized foreign exchange loss 543 (90) 437 250 (443)
One-time expenses 1,464
Unrealized loss (gain) on derivative liability
(106) (62)
Adjusted EBITDA (1,141) (1,948) (3,156) (1,459) (963)
Reconciliation of loss before income taxes to Adjusted EBITDA
36 / 39Not a bank. By design.
($000s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 FY 2015 FY 2014
Loss before income taxes $(4,264) $(4,684) $(6,804) $(5,596) $(5,653) $(21,348) $(13,068)
Technology and development 1,531 1,713 2,134 2,224 2,236 7,596 $3,904
Marketing 2,226 2,332 3,656 2,578 2,385 10,792 $4,642
General and administration 1,629 2,650 3,008 3,238 2,815 10,532 $4,911
Corporate interest expense 1,560 1,554 1,569 1,576 1,583 6,259 $6,086
One-time expenses 1,464
Other financing expenses 2 5 7 2 12 $680
Unrealized foreign exchange loss 543 (90) 437 250 (443) 1,143 $486
Unrealized loss (gain) on derivative liability - - - (106) (62) (106) -
Contribution 3,225 3,477 4,005 4,171 4,327 14,879 $7,641
Reconciliation of Loss before income taxes to Contribution
37 / 39Not a bank. By design.
(in $000s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Gross loans receivable – short-term $16,088 $16,780 $17,262 $17,224 $15,922
Gross loans receivable – long-term 13,146 20,901 36,658 51,111 54,088
Gross loans receivable 29,234 37,681 53,920 68,335 70,010
Reconciliation of Gross Loans Receivable
38 / 39Not a bank. By design.
Reconciliation of Cash provided by (used in) operating activities before investment in gross loans receivable
(in $000s) Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
Net cash used in operating activities $(10,084) $(9,395) $(19,887) $(17,603) $(4,635)
Increase in loans receivable (9,306) (11,166) (19,045) (17,586) (5,225)
Cash provided by (used in) operations before investment in loans receivable (778) 1,771 (842) (17) 590
39 / 39Not a bank. By design.