4FINANCE HOLDING SA. REPORTS RESULTS
FOR THE YEAR ENDING 31 DECEMBER 2023

Net profit of €44.2 million, showing continued profitable growth

Adjusted EBITDA of €131.3 million

Successful refinancing of EUR 2028 bonds adds to strong credit story

29 February 2024. 4finance Holding S.A. (the ‘Group’ or ‘4finance’), one of Europe’s largest digital consumer lending groups, today announces unaudited consolidated results for the twelve months ending 31 December 2023 (the ‘Period’).

Operational highlights

• Online loan issuance volume of €569.5 million in the Period compared with €496.8 million in the prior year, up 15% year-on-year. Demand for credit remains strong in most markets, with yearly issuance growth driven by Czech Republic, Spain and Philippines.
• New growth opportunities: taking a deliberate step-by-step approach. Started operations through a joint venture in the UK (ondal.co.uk) in February 2023, and in Mexico (kimbi.mx) in October 2023 with encouraging signs in both.
• TBI Bank loan issuance increased by 28% to €907.2 million in the Period, compared to €706.2 million in 2022.

Financial Highlights

• Interest income from continuing operations up 24% year-on-year to €385.8 million in the Period compared with €311.1 million in the prior year. For the prior year figures, the Polish business is reflected separately in the income statement as a 'discontinued operation'.
• Cost to income ratio for the Period was 43.4%, a significant improvement from 47.9% in 2022 (excluding Poland), despite the increase in total operating costs year-on-year.
• Adjusted EBITDA was €131.3 million for the Period, up 16% year-on-year (compared to the proforma adjusted EBITDA excluding Poland and including Philippines) delivering a 34% adjusted EBITDA margin. The interest coverage ratio as of the date of this report is 2.0x, impacted by the increased interest expense at TBI Bank in recent quarters.
• Net profit from continuing operations for the Period was €44.2 million, a 27% increase from €34.7 million in the prior year.
• Fundamental asset quality indicators at product level remain broadly stable. Net impairment charges of €148.4 million reflect the larger portfolio, different product mix in online and reduced debt sales activity in H1 2023. Cost of risk at 13.8% for FY 2023, a slight improvement from 9M 2023.
• Net receivables up 28% to €1,080.4 million as of 31 December 2023 compared with €846.4 million as of 31 December 2022.
• Overall gross NPL ratio at 9.4% as of 31 December 2023 (14.2% for online), compared with 8.8% as of 31 December 2022 (9.0% for online). TBI NPL ratio at 8.6% as of 31 December 2023, compared with 8.7% as of 31 December 2022.

Liquidity and funding

• Strong liquidity position, with €42.2 million of cash in the online business at the end of the Period.
• Technical completion of bond refinancing process in December 2023, with the new maturity in May 2028. Balanced medium-term capital structure in place, with two bond issues of very manageable sizes.
• In December 2023, the Group cancelled €15 million of EUR 2028 bonds, leaving €135 million outstanding in issue.

Kieran Donnelly, CEO of 4finance, commented:

“These results show our commitment to deliver ongoing profitability, with net profit from continuing operations up 27% to €44 million year-on-year, and quarterly gross income of €122 million, the highest in recent years. 

“We’ve managed growth while simultaneously reducing our cost-to-income ratio and made good progress in developing our businesses in Mexico and the UK. The successful bond refinancing in Q4 2023 adds to a strong credit story, with the next maturity not until October 2026. Our strong balance sheet and diversified portfolio allow us to continue to adapt and grow.”