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13.05.2024 08:30:22 - dpa-AFX: EQS-News: Eleving Group demonstrates strong performance and announces plans for future external equity raise (english)
Eleving Group demonstrates strong performance and announces plans for future
external equity raise
EQS-News: Eleving Group S.A. / Key word(s): Interim Report
Eleving Group demonstrates strong performance and announces plans for future
external equity raise
13.05.2024 / 08:30 CET/CEST
The issuer is solely responsible for the content of this announcement.
---------------------------------------------------------------------------
* The consumer loan segment contributed EUR 22.3 mln to the revenues.
Financial Highlights and Progress
* Solid profitability as evidenced by strongest-ever business financials:
* Adjusted EBITDA of EUR 22.0 mln (1Q2023: EUR 17.8 mln).
* Net profit before FX 7.8 mln (1Q2023: EUR 6.8 mln).
* Net profit of 5.4 mln (1Q2023: EUR 5.1 mln).
Modestas Sudnius, the CEO of the Eleving Group, comments: "In the first
quarter, the Group demonstrated exceptional performance in all key financial
indicators, recording historically strong profitability while also returning
to higher growth levels. It comes from strong performance across all our
business lines, a good-quality portfolio, and from maintaining a stable
expense level.
Our sales were exceptional, and we started 2024 with almost the same
issuance levels as we finished last year, though, typically, Q1 is a slower
quarter due to seasonality. It resulted from the successful integration of
Sub-Saharan business obtained in the previous year, from unlocking
additional market opportunities and weakened competition in markets like
Romania, Armenia, and Kenya. We see that our strategy of stricter
underwriting and cost-efficient management, applied over the last few years,
has paid off, and now we can return to more accelerated growth without
sacrificing the quality of the portfolio.
A short while ago, we publicly announced that we are assessing external
equity-raising to finance future growth. As a result, we have mandated LHV
Pank to advise us on external equity-raising opportunities in the Baltics
and Europe. We do not rule out an IPO as one of the routes Eleving Group
could take. With a successful external equity raise, we can expect to open
new markets and expand our product offer in the short- to mid-term. We plan
to grow our portfolio further, strengthen our capital structure, and
continue diversifying our debt stack with deals closed in Q1 2024. Also, the
ESG angle will remain among our priorities with active investments in
supporting green mobility products across our markets and strengthening our
corporate governance structure - introducing a supervisory board and
announcing dividend policy in upcoming months. All of that will further
enhance the transparency and fundability of the company.
It is worth noting that we have finalized the exit from Belarus and now have
sizeable capital deployed only in operational markers, which we are eager to
develop further. This, together with recently significantly decreased
exposure to volatile currencies through raising debt in local currency or
entering into currency hedge solutions, also decreases the Group's exposure
to outside factors, and reduces business risk as we advance.
Overall, the first chapter of the year has started on a very positive note,
and we look forward to the rest of the year. The main goals of this year are
to i) continue prudent organic growth, but at a higher level compared to
previous periods; ii) prepare for the launch of new products and markets in
2024; iii) focus on raising outside equity to support further growth and
strengthen the company while still maintaining a solid profitability and
equity return ratios."
Maris Kreics, the CFO of the Eleving Group, comments: "This has been another
robust quarter for our global business, delivering near-outstanding results
in all key business metrics. The Group generated revenues of EUR 51.8 mln,
up by 20% compared to the respective period a year ago, and a net portfolio
of EUR 330.5 mln, which is a 19% increase compared to 1Q 2023. The
corresponding adjusted EBITDA for this period reached EUR 22.0 mln, compared
to EUR 17.8 mln in the corresponding period last year. Furthermore, the net
profit before FX reached EUR 7.8 mln, an increase of around 15% compared to
the three-month period of 2023.
During the first quarter, the negative impact of foreign currency exchange
we saw in the previous two quarters decreased, and our hedging solutions
played a fundamental role in this. On top of that, borrowing in local
currency has been part of our fundraising strategy for some time and further
helps reduce the respective foreign currency exchange risks. We achieved
tangible results in this area in Namibia and Botswana, by raising more than
EUR 5.5 million for portfolio growth in both countries combined. Meanwhile,
in cooperation with ACP Credit, we attracted significant external debt
partner for the first time since we started the operations in Romania,
resulting in a EUR 10 million investment for Mogo Romania. In the future,
one of our main challenges will remain to continue diversifying our debt
profile by exploring new funding channels and formats. Within the Mintos
marketplace, we have successfully lowered the weighted average annual
funding to approximately 9.5%. This reduction in interest expenses will help
to enhance the Group's profitability.
Also, on 31 March, we met the maturity of Mogo AS 2021/2024 bonds (ISIN
LV0000802452). As a result, the Group's subsidiary in Latvia-Mogo
AS-successfully repaid to the bondholders a total of EUR 17.2 mln that was
not previously exchanged into the Eleving Group 2023/2028 senior secured and
guaranteed bonds (ISIN DE000A3LL7M4) issued last October.
The recent results show that the Group holds a strong position and a healthy
balance sheet, which are the fundamentals for successfully tapping capital
market opportunities and solid business performance in the long run."
Full unaudited consolidated report on the 3M period ended on 31 March:
https://eleving.com/investors/
Conference Call:
A conference call in English with the Group's management team to discuss the
results is scheduled for 15 May 2024 at 15:00 CET.
Link to register for a conference call can be found here.
Eleving Group
Edgars Rauza, Eleving Group Investor Relations Manager
Email: edgars.rauza@eleving.com
About Eleving Group
Eleving Group has driven innovation in financial technology around the world
since its foundation in Latvia in 2012. As of today, the group operates in
16 markets and 3 continents, encouraging financial inclusion and upward
social mobility in underserved communities around the globe. Eleving Group
has developed a multi-brand portfolio for its vehicle and consumer finance
business lines, with around 2/3 of the portfolio comprising secured vehicle
loans and mobility products, with Mogo as the leading brand, and around 1/3
of the portfolio including unsecured consumer finance products, with Kredo
and Tigo as the segment's flagship brands. Currently, 57% of the group's
portfolio is located in Europe, 30% in Africa, and 13% in the rest of the
world.
The Group's historical customer base exceeds 660,000 customers worldwide,
while the total volume of loans issued goes beyond EUR 1.7 billion. With
headquarters in Latvia, Lithuania, and Estonia and a governance structure in
Luxembourg, the Group ensures efficient and transparent business management,
powered at the operational level by 2718 employees. For two consecutive
years, the Group was listed among Europe's 1000 fastest-growing companies
published by the Financial Times in 2020 and 2021.
IMPORTANT INFORMATION
The information contained herein is not for release, publication, or
distribution, in whole or in part, directly or indirectly, in or into the
United States, Australia, Canada, Hong Kong, Japan, New Zealand, South
Africa, or any other countries or otherwise in such circumstances in which
the release, publication or distribution would be unlawful. The information
contained herein does not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of the bonds in any
jurisdiction in which such offer, solicitation, or sale would be unlawful
prior to registration, exemption from registration or qualification under
the securities laws of any such jurisdiction. Persons into whose possession
this announcement may come are required to inform themselves of and observe
all such restrictions.
This announcement does not constitute an offer of securities for sale in the
United States. The bonds have not been and will not be registered under the
Securities Act or under the applicable securities laws of any state of the
United States and may not be offered or sold, directly or indirectly, within
the United States or to, or for the account or benefit of, U.S. persons
except pursuant to an applicable exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act.
This announcement does not constitute a prospectus for the purposes of
Directive 2003/71/EC, as amended (the "Prospectus Directive") and does not
constitute a public offer of securities in any member state of the European
Economic Area (the "EEA").
This announcement does not constitute an offer of bonds to the public in the
United Kingdom. No prospectus has been or will be approved in the United
Kingdom in respect of the bonds. Accordingly, this announcement is not being
distributed to, and must not be passed on to, the general public in the
United Kingdom. The communication of this announcement as a financial
promotion may only be distributed to and is only directed at (i) persons who
are outside the United Kingdom or (ii) investment professionals falling
within Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the "Order") or (iii) high net worth
companies, and other persons to whom it may lawfully be communicated,
falling within Article 49(2)(a) to (d) of the Order (all such persons in
(i), (ii) and (iii) above together being referred to as "Relevant Persons").
Any invitation, offer or agreement to subscribe, purchase or otherwise
acquire such securities will be engaged in only with, Relevant Persons. Any
person who is not a Relevant Person should not act or rely on this
announcement or any of its contents.
PROFESSIONAL INVESTORS ONLY - Manufacturer target market (MIFID II product
governance) is eligible counterparties and professional clients only (all
distribution channels). No PRIIPs key information document (KID) has been
prepared as the bonds do not constitute packaged products and will be
offered to eligible counterparties and professional clients only.
---------------------------------------------------------------------------
13.05.2024 CET/CEST Dissemination of a Corporate News, transmitted by EQS
News - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The EQS Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.eqs-news.com
---------------------------------------------------------------------------
End of News EQS News Service
---------------------------------------------------------------------------
1900905 13.05.2024 CET/CEST
external equity raise
EQS-News: Eleving Group S.A. / Key word(s): Interim Report
Eleving Group demonstrates strong performance and announces plans for future
external equity raise
13.05.2024 / 08:30 CET/CEST
The issuer is solely responsible for the content of this announcement.
---------------------------------------------------------------------------
* Eleving Group finished the first quarter of 2024 with exceptional
consolidated results, recording revenues of EUR 51.8 mln, up by over 20%
compared to the respective reporting period a year ago.
* The Group's adjusted EBITDA reached its all-time best quarterly result
of EUR 22.0 mln, a significant leap of close to 24% compared to the
respective reporting period a year ago.
* The net portfolio increased to EUR 330.5 mln at the end of the first
quarter, up by 19%, compared to EUR 278.0 mln in Q1 of 2023. Meanwhile,
the loan issuance volumes were improved to EUR 79.0 mln, an increase of
27% compared to the respective reporting period a year ago.
* A diversified portfolio alongside a well-balanced revenue stream from
all key business segments:
* Flexible lease and subscription-based products contributed EUR 11.4
mln to the revenues.
* Traditional lease and leaseback products contributed EUR 18.1 mln to
the revenues.
* The consumer loan segment contributed EUR 22.3 mln to the revenues.
* In January, the Group received all the necessary approvals from
Belarusian government authorities regarding the Mogo Belarus sale, and
it can be considered that Eleving Group has successfully exited the
respective market. As of April, most of the payments for the business
have been received.
* In late Q1, Eleving Group mandated LHV Pank (Estonia) to act as the Lead
Arranger for a potential external equity raise in the Baltics and
Europe. The company aims to raise additional equity to facilitate
further business growth, potentially resulting in new products and
markets. An IPO is one of the avenues under consideration.
* In March, following the strong interest from local investors during the
Group's previous bond issuances and with a goal to simplify the process
of buying and selling the Group's 2021/2026 bonds (ISIN XS2393240887),
previously listed exclusively on the Frankfurt Stock Exchange, the
respective instrument was additionally listed on the Nasdaq Riga
regulated bond market.
* During the first quarter, the Group saw an increasing demand for its
green mobility products in the African region. Electric motorcycle
(e-boda) product in Kenya recorded more loans issued in the first three
months than in the entire year of 2023.
Financial Highlights and Progress
* Solid profitability as evidenced by strongest-ever business financials:
* Adjusted EBITDA of EUR 22.0 mln (1Q2023: EUR 17.8 mln).
* Net profit before FX 7.8 mln (1Q2023: EUR 6.8 mln).
* Net profit of 5.4 mln (1Q2023: EUR 5.1 mln).
* Total net loan and pre-owned vehicle rent portfolio of EUR 330.5 mln
(4Q2023: EUR 320.4 mln).
* 1Q2024 ended with a healthy financial position, supported by the
capitalization ratio of 26.9% (31 December 2023: 26.1%), ICR ratio
of 2.4 (31 December 2023: 2.3), and net leverage of 3.5 (31 December
2023: 3.7), providing an adequate and stable headroom for Eurobond
covenants.
* Eleving Group is further diversifying its debt profile and tapping into
various channels, primarily in local currencies, to limit foreign
exchange exposure.
* The Group has continued to diversify its outside debt structure by
attracting EUR 10 mln from ACP Credit for business development in
Romania.
* In March, the Group closed a deal with Private Capital Trust in
Namibia. A total of NAD 50 mln (about EUR 2.5 mln) funding was
secured for a one-year term in the local currency.
* In early April, the Group secured funding in the local currency with
Morula Capital Partners for a total facility of BWP 45 mln
(approximately EUR 3.0 mln) in Botswana, with different underlying
tranche maturities-6 to 18 months.
* The Group is actively continuing to tap the Mintos, marketplace for
loans, platform. As of the end of the first quarter, the Group had
outstanding loans of EUR 71.7 mln on Mintos (compared to EUR 63.9 mln as
of 31 December 2023), an increase of EUR 7.8 mln. The weighted average
annual funding cost for Mintos has been reduced from 10.7% to 9.5%,
which brings significant interest expense reduction for the Group,
further improving its profitability.
* During the first quarter, the Group increased its equity by EUR 4.9 mln
compared to 31 December 2023 (EUR 7.6 mln of it was due to positive
contribution from Total profit, while rest relates to changes in
subordinated debt position), further solidifying its capital base for
future growth.
* On 2 April, the Group's subsidiary in Latvia-Mogo AS-successfully repaid
its 2021/2024 bonds (ISIN LV0000802452) that matured on 31 March 2024.
Bondholders who did not exchange their Mogo AS 2021/2024 bonds for the
senior secured and guaranteed Eleving Group 2023/2028 bonds (ISIN
DE000A3LL7M4) during the exchange offer last October have received full
repayment of their investment.
Modestas Sudnius, the CEO of the Eleving Group, comments: "In the first
quarter, the Group demonstrated exceptional performance in all key financial
indicators, recording historically strong profitability while also returning
to higher growth levels. It comes from strong performance across all our
business lines, a good-quality portfolio, and from maintaining a stable
expense level.
Our sales were exceptional, and we started 2024 with almost the same
issuance levels as we finished last year, though, typically, Q1 is a slower
quarter due to seasonality. It resulted from the successful integration of
Sub-Saharan business obtained in the previous year, from unlocking
additional market opportunities and weakened competition in markets like
Romania, Armenia, and Kenya. We see that our strategy of stricter
underwriting and cost-efficient management, applied over the last few years,
has paid off, and now we can return to more accelerated growth without
sacrificing the quality of the portfolio.
A short while ago, we publicly announced that we are assessing external
equity-raising to finance future growth. As a result, we have mandated LHV
Pank to advise us on external equity-raising opportunities in the Baltics
and Europe. We do not rule out an IPO as one of the routes Eleving Group
could take. With a successful external equity raise, we can expect to open
new markets and expand our product offer in the short- to mid-term. We plan
to grow our portfolio further, strengthen our capital structure, and
continue diversifying our debt stack with deals closed in Q1 2024. Also, the
ESG angle will remain among our priorities with active investments in
supporting green mobility products across our markets and strengthening our
corporate governance structure - introducing a supervisory board and
announcing dividend policy in upcoming months. All of that will further
enhance the transparency and fundability of the company.
It is worth noting that we have finalized the exit from Belarus and now have
sizeable capital deployed only in operational markers, which we are eager to
develop further. This, together with recently significantly decreased
exposure to volatile currencies through raising debt in local currency or
entering into currency hedge solutions, also decreases the Group's exposure
to outside factors, and reduces business risk as we advance.
Overall, the first chapter of the year has started on a very positive note,
and we look forward to the rest of the year. The main goals of this year are
to i) continue prudent organic growth, but at a higher level compared to
previous periods; ii) prepare for the launch of new products and markets in
2024; iii) focus on raising outside equity to support further growth and
strengthen the company while still maintaining a solid profitability and
equity return ratios."
Maris Kreics, the CFO of the Eleving Group, comments: "This has been another
robust quarter for our global business, delivering near-outstanding results
in all key business metrics. The Group generated revenues of EUR 51.8 mln,
up by 20% compared to the respective period a year ago, and a net portfolio
of EUR 330.5 mln, which is a 19% increase compared to 1Q 2023. The
corresponding adjusted EBITDA for this period reached EUR 22.0 mln, compared
to EUR 17.8 mln in the corresponding period last year. Furthermore, the net
profit before FX reached EUR 7.8 mln, an increase of around 15% compared to
the three-month period of 2023.
During the first quarter, the negative impact of foreign currency exchange
we saw in the previous two quarters decreased, and our hedging solutions
played a fundamental role in this. On top of that, borrowing in local
currency has been part of our fundraising strategy for some time and further
helps reduce the respective foreign currency exchange risks. We achieved
tangible results in this area in Namibia and Botswana, by raising more than
EUR 5.5 million for portfolio growth in both countries combined. Meanwhile,
in cooperation with ACP Credit, we attracted significant external debt
partner for the first time since we started the operations in Romania,
resulting in a EUR 10 million investment for Mogo Romania. In the future,
one of our main challenges will remain to continue diversifying our debt
profile by exploring new funding channels and formats. Within the Mintos
marketplace, we have successfully lowered the weighted average annual
funding to approximately 9.5%. This reduction in interest expenses will help
to enhance the Group's profitability.
Also, on 31 March, we met the maturity of Mogo AS 2021/2024 bonds (ISIN
LV0000802452). As a result, the Group's subsidiary in Latvia-Mogo
AS-successfully repaid to the bondholders a total of EUR 17.2 mln that was
not previously exchanged into the Eleving Group 2023/2028 senior secured and
guaranteed bonds (ISIN DE000A3LL7M4) issued last October.
The recent results show that the Group holds a strong position and a healthy
balance sheet, which are the fundamentals for successfully tapping capital
market opportunities and solid business performance in the long run."
Full unaudited consolidated report on the 3M period ended on 31 March:
https://eleving.com/investors/
Conference Call:
A conference call in English with the Group's management team to discuss the
results is scheduled for 15 May 2024 at 15:00 CET.
Link to register for a conference call can be found here.
Eleving Group
Edgars Rauza, Eleving Group Investor Relations Manager
Email: edgars.rauza@eleving.com
About Eleving Group
Eleving Group has driven innovation in financial technology around the world
since its foundation in Latvia in 2012. As of today, the group operates in
16 markets and 3 continents, encouraging financial inclusion and upward
social mobility in underserved communities around the globe. Eleving Group
has developed a multi-brand portfolio for its vehicle and consumer finance
business lines, with around 2/3 of the portfolio comprising secured vehicle
loans and mobility products, with Mogo as the leading brand, and around 1/3
of the portfolio including unsecured consumer finance products, with Kredo
and Tigo as the segment's flagship brands. Currently, 57% of the group's
portfolio is located in Europe, 30% in Africa, and 13% in the rest of the
world.
The Group's historical customer base exceeds 660,000 customers worldwide,
while the total volume of loans issued goes beyond EUR 1.7 billion. With
headquarters in Latvia, Lithuania, and Estonia and a governance structure in
Luxembourg, the Group ensures efficient and transparent business management,
powered at the operational level by 2718 employees. For two consecutive
years, the Group was listed among Europe's 1000 fastest-growing companies
published by the Financial Times in 2020 and 2021.
IMPORTANT INFORMATION
The information contained herein is not for release, publication, or
distribution, in whole or in part, directly or indirectly, in or into the
United States, Australia, Canada, Hong Kong, Japan, New Zealand, South
Africa, or any other countries or otherwise in such circumstances in which
the release, publication or distribution would be unlawful. The information
contained herein does not constitute an offer to sell or the solicitation of
an offer to buy, nor shall there be any sale of the bonds in any
jurisdiction in which such offer, solicitation, or sale would be unlawful
prior to registration, exemption from registration or qualification under
the securities laws of any such jurisdiction. Persons into whose possession
this announcement may come are required to inform themselves of and observe
all such restrictions.
This announcement does not constitute an offer of securities for sale in the
United States. The bonds have not been and will not be registered under the
Securities Act or under the applicable securities laws of any state of the
United States and may not be offered or sold, directly or indirectly, within
the United States or to, or for the account or benefit of, U.S. persons
except pursuant to an applicable exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act.
This announcement does not constitute a prospectus for the purposes of
Directive 2003/71/EC, as amended (the "Prospectus Directive") and does not
constitute a public offer of securities in any member state of the European
Economic Area (the "EEA").
This announcement does not constitute an offer of bonds to the public in the
United Kingdom. No prospectus has been or will be approved in the United
Kingdom in respect of the bonds. Accordingly, this announcement is not being
distributed to, and must not be passed on to, the general public in the
United Kingdom. The communication of this announcement as a financial
promotion may only be distributed to and is only directed at (i) persons who
are outside the United Kingdom or (ii) investment professionals falling
within Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (the "Order") or (iii) high net worth
companies, and other persons to whom it may lawfully be communicated,
falling within Article 49(2)(a) to (d) of the Order (all such persons in
(i), (ii) and (iii) above together being referred to as "Relevant Persons").
Any invitation, offer or agreement to subscribe, purchase or otherwise
acquire such securities will be engaged in only with, Relevant Persons. Any
person who is not a Relevant Person should not act or rely on this
announcement or any of its contents.
PROFESSIONAL INVESTORS ONLY - Manufacturer target market (MIFID II product
governance) is eligible counterparties and professional clients only (all
distribution channels). No PRIIPs key information document (KID) has been
prepared as the bonds do not constitute packaged products and will be
offered to eligible counterparties and professional clients only.
---------------------------------------------------------------------------
13.05.2024 CET/CEST Dissemination of a Corporate News, transmitted by EQS
News - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The EQS Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.eqs-news.com
---------------------------------------------------------------------------
Language: English
Company: Eleving Group S.A.
8-10 avenue de la Gare
1610 Luxembourg
Luxemburg
Internet: www.eleving.com
ISIN: XS2393240887
WKN: A3KXK8
Listed: Regulated Unofficial Market in Dusseldorf, Frankfurt,
Hamburg, Hanover, Munich, Stuttgart, Tradegate
Exchange; SIX
EQS News ID: 1900905
End of News EQS News Service
---------------------------------------------------------------------------
1900905 13.05.2024 CET/CEST
