- ISIN LU2818110020
- Country Luxemburg
Eleving Group S.A.
An outstanding year with promising prospects for robust growth in the future
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EQS-News: Eleving Group S.A.
/ Key word(s): Annual Results
Operational and Strategic Highlights
Financial Highlights and Progress
Modestas Sudnius, the CEO of Eleving Group, comments: “Entering this year, it was clear that high inflation rates and the growing cost of borrowing would challenge overall client payment behavior. Also, Eleving Group had a significant debt of its own, which had to be managed in the best possible way. And finally, we had a goal to increase our efficiency and profitability as an organization further. Looking back, I can tell that we had very ambitious goals, and I am even more delighted to conclude that we managed to achieve most of them and even more. We were able to have a stable year with increasing portfolio quality; on top of that, in the second part of the year, we laid the foundation for further growth in 2024 – through the integration of consumer finance businesses in the South African region, by capturing new possibilities in our existing markets and securing future financing by issuing new EUR 50 mln bonds. Despite the uncertainty in the global economy, demand for consumer credit products has not weakened, and people’s ability to pay is still higher than expected in a period of rising interest rates and inflation. In the vehicle financing segment, after a slightly slower start early in 2023, we recovered the dynamics in the second half. This mixed trend was, however, to be expected, as people temporarily postponed large purchases. In the meantime, the unsecured consumer finance business grew steadily throughout the year, benefiting from weakening competition and utilizing previously established business essentials – a vast sales network through online and offline channels and well-calibrated customer scoring models. We have successfully addressed the diversification of our funding structure by unlocking numerous additional financing channels like local impact funds, bank loans, local notes, and, of course, the latest bond issue that attracted EUR 50 mln and improved our debt maturity profile. Also, we continue to maintain lean operations and strong cost discipline. Together with the increasing digitization of our daily processes, we have managed to maintain a very cost-effective business even in an inflationary environment. In recent years, our mindset has been more focused on organic expansion in our core business lines. However, the integration of ExpressCredit business will allow us to expand while still maintaining strong position in other existing markets. We are open to exploring further growth opportunities through new market launches or acquisitions. However, it will not be growth at the cost of profit, and this would become a priority in case of additional equity injection in the business. We will continue actively participating in the capital markets and exploring all the opportunities these avenues offer. Having a well-diversified debt stack in place with no significant maturities upcoming in 2024, our focus will be on potential equity raising, exploring opportunities both in Baltic markets and outside it, not ruling out IPO as one of the routes. In the meantime, the Group strengthened its position in green mobility by rapidly expanding the electric car-sharing service in Latvia and electric motorcycle financing service in Kenya. Our customers commuted over 3.2 million kilometers on pure electricity, thus reducing over 300tCO2 compared to what traditional vehicles would have produced. This year, more than in other years, we see that people paid much more attention to the so-called value for money criteria. This translated into more sustainable decisions, i.e., a greater demand for green mobility solutions that are more climate-friendly and economical in the medium to long term. This trend will likely continue next year, so we expect good results from our sustainable mobility products.” Māris Kreics, the CFO of Eleving Group, comments: “Despite the challenging year of peak interest rates and inflation, Eleving Group achieved strong results in all key financial indicators. The Group’s adjusted EBITDA increased to EUR 77.2 mln, or by over 21%, compared to 2022, while the total revenue, including fee and commission income, reached EUR 191.1 mln, showing an increase of close to 9%. The adjusted net profit before FX landed at EUR 29.8 mln, up by 35%, while the net portfolio reached EUR 320.2 mln. It was a year in which we made a solid effort to increase our efficiency and improve our cost of risk. Compared to last year, the Group also achieved higher relative profitability, allowing it to absorb any foreign currency exchange rate fluctuations successfully. With local funding and hedging solutions in place, Eleving Group is expected to have a limited negative impact on foreign currency exchange rates in the coming years. We also strengthened the Group’s capitalization ratio while maintaining sustainable dividend payout levels. During 2023, we continued to diversify our funding structure by raising USD 7 mln from the Verdant Capital Hybrid Fund for the Kenyan portfolio growth. In addition, we successfully continued our Kenyan note program, through which we raised more than EUR 13 mln for business development. Furthermore, in 2023, we established the cooperation with ACP Credit, Central Europe’s leading provider of financing solutions for middle-market businesses. As a result, in early 2024, Mogo Romania received an investment of EUR 10 mln, making it the first time in the Group’s history that a significant external funding partner outside the Mintos marketplace was brought to Mogo Romania. In addition, we continued to develop our electric car-sharing service, OX Drive, by raising EUR 2.8 million from Industra Bank to expand its car fleet. Of course, one of the highlights of the year was the issuance of the latest Eurobond and subsequent listing on the Baltic and Frankfurt stock exchanges, resulting in EUR 50 mln raised and over 2,000 new investors onboarded. The bond issue was mainly tailored towards the existing investors (both retail and professional ones) from the Baltic states. In terms of volume, this was one of the largest corporate issuances in the Baltics in recent years. Retail investors from Estonia were particularly active. Therefore, we can assume that companies with a strong track record and a healthy balance sheet still have support from local retail investors even in volatile market conditions characterized by an ambiguous investment landscape. Furthermore, I would like to note that Fitch Ratings affirmed Eleving Group’s long-term Issuer Default Rating (IDR) and Senior Secured Debt Rating (SDRR) at ‘B-,’ with a stable outlook. Despite the global economic challenges, we have maintained this performance for the fourth consecutive year. In conclusion, it was a successful year for the company, with healthy growth, sound decisions that delivered expected results, and a strong financial position that will contribute to the future sustainable development of our global business.” Full unaudited consolidated report on the 12M period ended on 31 December: https://eleving.com/investors/ Conference Call: A conference call in English with the Group’s management team to discuss the results is scheduled for 14 February 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 comprises a number of financial technology companies with a global presence. The Group operates in the vehicle and consumer finance segments on three continents, providing financial inclusion and disruptively changing financial services industries in its countries of operation. Founded in 2012 in Latvia, the Group has revolutionized how people purchase cars. Having expanded across the Baltics within its first year in business, the Group continued expanding in the following years, servicing 16 active markets. With its headquarters in Latvia, the Group operates in the Baltics, Central, Eastern, and South-Eastern Europe, Caucasus, Central Asia, Sub-Saharan and Eastern Africa. For two consecutive years since 2020, the Group has appeared on the Financial Times list of Europe’s 1000 fastest-growing companies. 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.
12.02.2024 CET/CEST Dissemination of a Corporate News, transmitted by EQS News – a service of EQS Group AG. |
| 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: | 1834779 |
| End of News | EQS News Service |
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