Ferratum Group publishes preliminary unaudited full-year results for 2019. Reducing 2020 revenue and EBIT expectations - Seite 2

Ferratum delivered continued growth in 2019 by expanding its product offering in its existing operational countries. The Group continues to shift its focus away from short-term products to longer-term loans. In 2019, the Group’s revenue increased to EUR 293.1 million, an increase of 11.8% compared to the respective period of the previous year (2018: EUR 262.1 million). The growth was mainly driven by the groups‘ flagship product Credit Limit and its relatively new strategic core product Business Lending (SME).

Operating profit (EBIT) for the period increased significantly year-on-year by 20.5% to EUR 45.5 million (EBIT-margin: 15.5%) compared to EUR 37.8 million in 2018. The profit before tax (EBT) in 2019 increased by 23.3% to 27,5 million (2018: EUR 22,3 million). The increased EBIT and EBT performance resulted from actions taken by the management to enhance cost efficiency, achieve operative leverage, and improve marketing efficiency.

As communicated at the beginning of the financial year 2019, Ferratum’s management attention has been on cost discipline to improve efficiency and operative margins. Given the management’s focus, the Group is pleased to have been able to deliver continued growth for one of the important key performance indicators: gross and net value of loans to customers. The gross value of loans to customers grew by 18.8% to EUR 555.9 million and the net value with +20.5% to EUR 386.2million.

Deposits from customers continued to grow and reached EUR 242.2 million by the year end 2019, an increase of 32.0% compared 2018. The Group has issued new loans to customers in Finland under the banking licence since November 2019 and incorporated Denmark into the bank in December, enabling the group to further utilise deposit funding.

The net debt to equity ratio stood at 2.59 at the end of 2019, well within Groups’ bond covenants of 3.5.

Impairments increased year-on-year by 19.4% to EUR 105.7 million and the impairment-ratio (impairments divided by Group revenue) increased by 2.3% to 36.1%. In Q1/19 the ratio stood at 39.2%, largely related to a strong loan volume growth in Ferratum’s SME business and higher impairments on loans which had been distributed to consumer customers in 2018 in some selected markets during a marketing campaign. Over the course of the year, the quarterly ratios normalised and reduced compared to Q1/19 (Q2 2019: 35.4% Q3 2019: 34.0%, Q4 2019: 35,6%). Furthermore, impairments over net loans to customers have been stable at 27.4% demonstrating Ferratum’s scoring discipline.