alphacredit...diversified among 9 different industries source: alpha holding’s non-audited...

06 | 2018

AlphaCredit

Private and Confidential – Do not copy or distribute

Contact:

+52-(55)-5292-7511

[email protected]

www.alphacredit.mx

Earnings Release – 1Q 2018

mailto:[email protected]

http://www.alphacredit.mx/

Private and Confidential Do not copy or distribute

AlphaCredit’s business lines

2011 2012 2013 2014 2015 2016 2017 1Q'18

2

Description

Alpha Holding, S.A. de C.V (“AlphaCredit”, “AC” or the “Company”) is a leading specialty

finance company headquartered in Mexico City that offers (A) consumer loans through

(i) Payroll Deduction Loans (“PDLs”) in Mexico and Colombia and (ii) Automated

Clearing-House Debit Loans (“ACH”) in Mexico, and (B) financing solutions to small and

medium-sized companies (“SMEs”) in Mexico through (i) Factoring and (ii) Leasing

services

AlphaCredit began operations in 2011 by providing PDLs to federal and state

government employees in Mexico

In July 2015 AC expanded into the Colombian market and disbursed its first PDL at the

beginning of 2016. The Colombian operations are supported by strong experience,

know-how and expertise developed in Mexico alongside a strong local senior

management team and regulatory framework

In 2016, the Company expanded its consumer portfolio by offering ACH loans to

Mexican pensioners and retirees

Also in 2016 the Company entered into the Mexican SMEs sector by providing Factoring

and Leasing services

Gross portfolio evolution (MXN$ mm)

Geographical presence

Consumer loans91.9%

SMEs loans8.1%

2.7%Factoring loans

1.6%Leasing loans

79.8%PDL - Mexico

8.4%PDL - Colombia

3.7%ACH loans

Gross portfolio: MXN$6,481 mm1

Source: Alpha Holding’s non-audited financial information as of March 20181 Considers Leasing portfolio included as PP&E in the Company’s Balance Sheet 2 Includes Structured loans and Working capital loans to AC´s main PDLs brokers that use funds to originate PDLs for AC (the Company does not offer these products anymore)

3.8%Other loans2

CAGR ‘14 – ’17 = 70.4%

AlphaCredit’s consumer lending geographical footprint is managed through:

• +180 branches in Mexico and +10 branches in Colombia

• over 2,300 sales force agents in Mexico and 650 in Colombia

Headquarters

AlphaCredit’s SME lending provides two major financial solutions to SMEs in different regions in Mexico:

• operating and financial leases, and

• A/R financing (direct factoring) and supply chain financing (reverse factoring)

6,4811

Company overview


$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17 Oct-17

3

Source: Alpha Holding’s non-audited financial information as of March 2018

AlphaCredit stand-alone total cumulative disbursed portfolio (MXN$ mm)

AlphaCredit disburses its first PDL loan

AlphaCredit issues MXN$400 mm PDLs portfolio

securitization in the Mexican Stock Exchange (BMV)

Acquisition of:

AlphaCredit’s expansion to Colombia

Acquisition of:

AlphaCredit introduces ACH debit loans

AlphaCredit begins Factoring & Leasing operations

Acquisition of:

AlphaCredit timeline

Alpha Holding issuesUSD $300 mm International bond due 2022

AlphaCredit has raised more than US$800 mm in

debt with local and international financial

institutions and the public markets

Interest income

Gross loans

Total assets

Book value

2014 – 2017 CAGR

65.1%

70.4%

106.5%

67.4%

Mar-18


Consumer lending portfolio breakdown as of March 2018

4

PDL Mexico portfolio by state PDL Mexico portfolio by sector

PDL Colombia portfolio by region PDL Colombia portfolio by sector

PDL Mexico

PDL Colombia

Number of loans outstanding: +200,000

Average loan size (MXN$): ~30,000

Average original term (months): 42

Average annual interest rate (%): 46.6%

Product highlights:

▪ Represented 82% of Revenue in 1Q’18

▪ 59% of 1Q’18 total origination

▪ Represented 80% of Total Portfolio1 in 1Q’18

▪ 3.3% of NPL portfolio

▪ Diversified with more than 340 government agreement across the 32 states in Mexico





Product highlights:





▪ Diversified with more than 110 government agreements across the 6 regions in Colombia

Source: Alpha Holding’s non-audited financial information as of March, 2018 1 Considers Leasing portfolio included as PP&E in the Company’s Balance Sheet

34%

9%

5%

5%

47%

CDMX

Sinaloa

Tabasco

Chiapas

Others (28)

57% 18%

15%

7%

3%

Federal

Health

Education

State

Others (3)

50%

15%

13%

9%

13%Centro

Antioquia

Costa

Occidente

Others (2)

63%13%

13%

11%

Pensioners

State

Education

Others (6)


119

476

545

2015 2016 2017 1Q'18

Consumer lending portfolio breakdown as of March 2018 (cont’d)

5

ACH portfolio by state ACH portfolio by sector

PDL Colombia portfolio evolution ACH portfolio evolution

Automated Clearing-House Debit Loans

Consumer Loans portfolio evolution (MXN$ mm)

PDL Mexico portfolio evolution





Product highlights:





▪ Diversified among retirees from 10 different state pension plans

Source: Alpha Holding’s non-audited financial information as of March, 20181 Considers Leasing portfolio included as PP&E in the Company’s Balance Sheet

21%

10%

7%

6%6%

50%

Sonora

CDMX

Coahuila

Veracruz

Sinaloa

Others (27)59%

41%Retiree

Pensioner

1,374

4,192

4,967 5,196

2015 2016 2017 1Q'18

99

232 242

2015 2016 2017 1Q'18


3

64

102

2015 2016 2017 1Q'18

9

156

175

2015 2016 2017 1Q'18

SME lending portfolio breakdown as of March 2017

6

Factoring product diversification Factoring portfolio evolution

Leasing exposure by asset type Leasing portfolio evolution

Factoring

Leasing

Number of invoices discounted outstanding: +600

Average loan size (MXN): ~200,000

Average original term (days): 90

Compounded WA IRR (%): 27.1%

Number of transactions outstanding: +70

Average lease size (MXN’000): ~1,500


Compounded WA IRR (%): 32.1%

Product highlights:

▪ Represented 2% of revenue in 1Q’18



▪ 0% NPL portfolio

▪ Diversified among 9 different industries

Product highlights:




▪ 0% NPL portfolio

▪ Diversified among 9 different industries

Source: Alpha Holding’s non-audited financial information as of March, 20181 Considers Leasing portfolio included as PP&E in the Company’s Balance Sheet

87%

13%

AR Factoring

Supply ChainFactoring

52%32%

16%M&E

Auto

OfficeEquipment


2018 2019 2020 2021 2022 - OlderInternational Notes Bank Credit Lines Asset Securitization International Funds Others

AlphaCredit’s debt profile

7

Source: Alpha Holding’s non-audited financial information as of March, 2018 1 Refers to principal outstanding balance; 2 76% (3% of the Company’s total debt) of the Company’s Floating Rate has been hedged via Interest Rate derivatives

6276971,044

1,610

7,358

Type of Debt Fixed rate vs Floating rateSecured vs Unsecured

49%

23%

3%

15%

9%

InternationalNotes

Bank CreditLines

AssetSecuritization

InternationalFunds

OthersTotal = MXN$11,337 mm

65%

35% Unsecured

Secured

96%

4%

Fixed Rate

Floating Rate2

1

Total Debt - Maturity profile (MXN$ ‘mm)1


Income Statement by business unit

8

Source: Alpha Holding’s non-audited financial information as of March 20181 Negative carry attributable to incremental debt issued and not yet deployed by the Company; 2 Considers March 2018 effective tax rate

Consumer Consumer SME 1Q’18 Corporate

(MXN$ million) Lending Mexico Lending Colombia Lending (adj.) Adjustments1 1Q’18

Interest income and Fees 604 40 23 667 0 667

Interest expense and Fees (244) (14) (6) (264) (154) (418)

Financial margin 360 26 17 403 (154) 249

Allowance for loan losses (33) (3) (1) (37) 0 (37)

Financial margin adjusted for credit risks 327 23 16 366 (154) 212

Administrative expenses (203) (14) (10) (227) 0 (227)

Other expenses, net 24 (6) (2) 16 0 16

Income before income taxes 148 3 4 155 (154) 1

Income tax benefit (expense) (45) (1) (1) (47) 46 (1)

Non-controlling interest 4 0 0 4 0 4

Net Income 107 2 3 112 (108) 4

January to March 2018

2


463 659

1,049

2,087 2,232

2014 2015 2016 2017 1Q'18(LTM)

Interest Income Ave. Interest income rate

9

Source: Alpha Holding’s non-audited financial information as of March 2018 1 Includes Structured loans and Working capital loans to AC´s main PDLs brokers that use funds to originate PDLs for AC (the Company does not offer these products anymore); 2 Includes opening fees charged in our consumer lending and SME lending businesses 3 Calculated as Interest income LTM divided by the average gross loan portfolio

2014 2015 2016 2017 1Q'18

CAGR ‘14 – ’17 = 70.4%

PDL

Colombia

ACH

F&L

Others1

Net Income (MXN$ mm)

Financial highlights

Gross loans (MXN$ mm)

Interest Income2 (MXN$ mm)

56 53

115

198

2014 2015 2016 2017 1Q'18 adj.(LTM)

1,694

4,676

6,083

CAGR ‘14 – ’17 = 65.1%

45.1%

32.9%

38.8%38.7%

3

NPLs (MXN$ mm)

24 36

171

228

198

2014 2015 2016 2017 1Q'18

NPL NPL Ratio

2.1%

3.7%

3.7%

658

3.1%

6,481

1,230

2.0%

48.9%


Credit Highlights

67.8%

43.1%37.9% 35.2%

2015 2016 2017 1Q'18

Capitalization Ratio1 Coverage Ratio3Net Financial Leverage2

Efficiency Ratio %4 ROAE6ROAA5

Source: Alpha Holding’s non-audited financial information as of March 20181 Calculated as Total Shareholders’ Equity divided by Gross Loan Portfolio; 2 Calculated as Net Debt divided by Total Shareholders’ Equity; 3 Calculated as Allowance for Loan Losses divided by Non-Performing Loans; 4

Calculated as Administrative and Promotion Expenses for the period divided by the Financial Margin for the period; 5 Calculated as Net Income for the last twelve months (LTM) divided by average Total Assets; 6 Calculated asNet Income for the last twelve months (LTM) divided by average Stockholders’ Equity

1.3x

2.8x3.1x

3.5x

2015 2016 2017 1Q'18

127.3% 128.9%120.7%

106.9%

2015 2016 2017 1Q'18

48.3%

82.7% 82.2%

57.2%

2015 2016 2017 1Q'18 adj.

0.7% 0.9%

1.5%

2015 2016 2017 1Q'18 adj.

3.4% 5.3%

9.4%

2015 2016 2017 1Q'18 adj.

80.2%21.0%

10


Income Statement

11

Source: Alpha Holding’s non-audited financial information as of March 2018

1Q’18

(MXN$ million) 2017YE 1Q’18 (adj.)

Interest income and Fees 2,087 667 667

Interest expense and Fees (1,130) (418) (264)

Financial margin 957 249 403

Allowance for loan losses (78) (37) (37)

Financial margin adjusted for credit risks 880 212 366

Administrative expenses (768) (227) (227)

Other expenses, net 24 16 16

Income before income taxes 135 1 155

Income tax benefit (expense) (37) (1) (47)

Non-controlling interest 18 4 4

Net Income 115 4 112


Balance Sheet

12

Source: Alpha Holding’s non-audited financial information as of March 20181 Leasing portfolio is included as PP&E in the Company’s Balance Sheet

(MXN$ million) 2017YE 1Q’18

Cash, cash equivalents and restricted cash 4,920 3,446

Performing loan portfolio:

Personal loans 5,447 5,759

Loans to other entities 345 422

Non-performing loan portfolio:

Personal loans 228 197

Total loan portfolio 6,019 6,379

Allowance for loan losses (275) (211)

Net loan portfolio 5,745 6,167

Other assets1 5,795 5,963

Total assets 16,460 15,576

Loans from banks and other entities 12,286 11,348

Sundry creditors and other payables 1,217 1,401

Taxes 650 547

Total liabilities 14,153 13,296

Total stockholders’ equity 2,307 2,280

Total liabilities and stockholders’ equity 16,460 15,576


Key ratios

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Source: Alpha Holding’s non-audited financial information as of March 20181 Calculated as Financial Margin for the LTM divided by the total gross loan portfolio at the end of the period; 2 Calculated Net Income for the LTM divided by average Total Assets; 3 Calculated as Net Income for the LTM dividedby average Stockholders’ Equity 4 Calculated as Loans From Banks and Other Entities net of Cash at the end of the period divided by Stockholders’ Equity at the end of the period; 5 Calculated as Interest Income for the LTMdivided by the average Gross Loan Portfolio; 6 Calculated as Interest Expense for the LTM divided by average Interest Bearing Liabilities; 7 Calculated as Administrative and Fee Expense for the period divided by the sum ofInterest Income and Fees, minus Interest Expense for the period; 8 Calculated as total Stockholders’ Equity at the end of the period divided by Total Gross Loan Portfolio at the end of the period

2017 1Q’18 1Q’18 (adj)

Financial margin1 15.7% 14.9% 17.3%

ROAA: Return on average total assets2 0.9% 0.7% 1.5%

ROAE: Return on average stockholders’ equity3 5.3% 4.3% 9.4%

Net debt to equity ratio4 3.1x 3.5x 3.5x

Average interest income rate (total portfolio)5 38.8% 38.7% 38.7%

Average cost of funds6 11.1% 12.8% 11.1%

Efficiency ratio7 82.2% 91.3% 57.2%

Capitalization ratio8 37.9% 35.2% 35.2%


Disclaimer

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The material that follows is a confidential presentation of general background information about Alpha Holding, S.A. de C.V. (“AlphaCredit”, “AC” or “theCompany”), and its subsidiaries as of the date of the presentation. It has been prepared solely for informational purposes and is not to be construed as asolicitation or an offer to buy or sell any securities and should not be treated as giving investment advice to potential investors. The information containedherein is in summary form and does not purport to be complete. No representations or warranties, express or implied, are made concerning, and no relianceshould be placed on, the accuracy, fairness, or completeness of this information. Neither AlphaCredit nor any of its affiliates accepts any responsibilitywhatsoever for any loss or damage arising from any information presented or contained in this presentation. The information presented or contained in thispresentation is current as of the date hereof and is subject to change without notice and its accuracy is not guaranteed. Neither AlphaCredit nor any of itsaffiliates make any undertaking to update any such information subsequent to the date hereof.This confidential presentation contains forward-looking statements and both operating and financial figures relating to AlphaCredit that reflect the currentviews and/or expectations of AlphaCredit and its management with respect to its performance, business and future events. Forward-looking statementsinclude, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain wordslike “believe”, “forecast”, “estimate”, “anticipate”, “expect”, “envisage”, “intend”, “plan”, “project”, “target” or any other words or phrases of similarmeaning. Such statements are subject to a number of risks, uncertainties and assumptions. Forward-looking statements are not guarantees of futureperformance and our actual results or other developments may differ materially from the expectations expressed in the forward-looking statements. As forforward-looking statements that relate to future financial results and other projections, actual results may be different due to the inherent uncertainty ofestimates, forecasts and projections. Because of these uncertainties, potential investors should not rely on these forward-looking statements. NeitherAlphaCredit nor any of its affiliates, directors, officers, agents or employees, nor any of the shareholders shall be liable, in any event, before any third party(including investors) for any investment or business decision made or action taken in reliance on the information and statements contained in thispresentation or for any consequential, special or similar damages.Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the U.S. Securities Act of 1933, asamended. No action has been taken in any jurisdiction to permit a public offering or distribution of any securities. Any offering of securities to be made willbe made solely by means of a confidential offering memorandum. Such confidential offering memorandum will contain detailed information aboutAlphaCredit, and its subsidiaries, its business and financial results, as well as its financial statements. This presentation does not constitute an offer, orinvitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basisof any contract or commitment whatsoever. This document has not been approved by the U.S. Securities and Exchange Commission, nor any othercompetent regulatory or supervisory authority.Statements about market share and other information relating to the consumer finance industry in Mexico and Colombia includes, among others,statements pertaining to payroll loans, credit cards and insurance premium finance which are derived from internal surveys, third-party sources, industrypublications and publicly available information. Notwithstanding any investigation that AlphaCredit or any affiliate may have conducted with respect to themarket share, market size or similar data provided by third parties, assume no responsibility for the accuracy or completeness of any such information.This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part withoutAlphaCredit’s prior written consent.

Private and Confidential – Do not copy or distribute

alphacredit...diversified among 9 different industries source: alpha holding’s non-audited...

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