Eleving Group demonstrates strong performance and announces plans for future external equity raise

• 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.

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