Published: 2015-11-26 07:00:00 CET
Mash Group Oyj
Press release

Euroloan Group PLC interim report 1.7.-30.9.2015

Euroloan delivers on its promise for the third quarter as turnover from lending operations hit a new high. The Group has continued to strengthen its balance sheet and operational profitability. Financially, Euroloan is in an excellent situation and the outlook for the fourth quarter and the next financial year is positive.

Helsinki, Finland, 2015-11-26 07:00 CET (GLOBE NEWSWIRE) --  

The positive financial situation has helped Euroloan achieve further growth and record turnover during the third quarter. Turnover grew to over 3,2 million EUR from 2,9 million EUR in the previous quarter, corresponding to a yearly rate of nearly 13 million EUR, compared to 9,9 million EUR in 2014. Total income for the first three quarters is in excess of 10,1 million EUR, including one-time items.

The current receivables grew by 12% to 41,7 million EUR from the previous 37,1 million EUR, as excess cash reserves were successfully converted into lending volume. Cash reserves correspondingly decreased from 9,3 million EUR to 1,9 million EUR, improving capital efficiency. The Group’s balance sheet total was down 4% as some short-term funding was repaid with excess cash.

The Group’s equity ratio increased to 34%. Operational profitability (EBIT/Sales) excluding one-time items increased from 31% to 40%, again as a result of continuous improvement in operations, credit assessment and pricing criteria.

  Q3 2015 Q2 2015 Q1 2015
Balance (million EUR) 55,3 57,8 53,4
Balance Growth -4 % 8 % 18 %
Current Receivables (million EUR) 41,7 37,1 31,6
Current Receivables Growth 12 % 17 % 6 %
Turnover (million EUR) 3,2 2,9 2,6
EBIT (million EUR) 1,3 2,3 0,7
EBIT/Sales 40 % 53 %* 28 %
Net profit (million EUR) 0,19 1,18 0,01
Equity ratio 34 % 32 % 33 %
*Excluding one-time items, EBIT/Sales was 31%.      

 

Key events during the period

The Swedish Financial Supervisory Authority (SFSA) authorized Euroloan (ELCF Sweden AB), a subsidiary of Euroloan Group Plc, to conduct consumer lending in Sweden. The license enables Euroloan Group to grow rapidly, and means that the SFSA finds the company's key procedures and lending criteria to be sound and in good order. Tommi Lindfors, Chairman of Euroloan Group Plc commented: “We are pleased that our fully automated core processes, which we use in all our markets, have been approved by the SFSA. During the last few years we have built a solid foundation for our rapidly expanding business, which ensures our continuing success story”.

Euroloan Consumer Finance Plc and Ab Compass Card Oy Ltd announced that they will start providing credit cards to Euroloan’s customers. The planned launch date for the new credit card service is later this year. Mr. Risto Illukka, CEO of Euroloan Consumer Finance Plc stated: “With the credit card, we have added a convenient payment solution to complement our service palette, which already include virtual credit cards, online payments and vendor finance. The Euroloan credit card is a MasterCard, which can be used globally in all stores, ATMs and webshops that accept MasterCard. Customers can also pay contactless in payment terminals which means paying small amounts by barely touching the payment terminal with the credit card.”

Euroloan Group achieved ISO 27001:2013 Information Security Certification for the information security management system of the Group and all its subsidiaries in Finland, Poland and Sweden. “ISO 27001 is the only auditable international standard which defines the requirements for an ISMS. The certification confirms that Euroloan’s processes and security controls provide an effective framework for protecting our customers’ data. Information security is of top priority both for us and for financial services in general, so it was a natural direction to go for the most stringent information security certification, which is ISO 27001. We are one of the first FinTech companies in the Baltic area and one of few in Europe to achieve certification for our ISMS””, commented Chief Operating Officer Joachim von Schantz. 

 

Interim Financial Statement

 

BALANCE SHEET Q3 2015 Q2 2015 Q1 2015 2014*
ASSETS        
NON-CURRENT ASSETS        
   Intangible assets 11 726 848,34 11 344 175,99 11 353 465,97 11 072 293,61
   Tangible assets and investments 17 760,85 28 526,20 28 526,20 28 526,20
TOTAL NON-CURRENT ASSETS 11 744 609,19 11 372 702,19 11 381 992,17 11 100 819,81
         
CURRENT ASSETS        
  Current Receivables 41 654 341,62 37 060 350,26 31 592 124,87 29 872 532,29
  Cash and Bank Receivables 1 906 071,65 9 349 015,51 10 402 105,02 4 192 692,81
TOTAL CURRENT ASSETS 43 560 413,27 46 409 365,77 41 994 229,89 34 065 225,10
TOTAL ASSETS 55 305 022,46 57 782 067,96 53 376 222,06 45 166 044,91
         
EQUITY & LIABILITIES        
EQUITY        
  Share capital and issue 80 000,00 80 000,00 1 434 998,00 1 434 998,00
  Translation difference -30 503,71 -30 503,71 -30 503,71 -30 503,71
  Reserve for invested non-restricted equity 16 567 254,34 15 967 568,66 15 108 290,66 15 108 290,66
  Retained earnings 569 585,38 1 173 868,58 1 193 444,58 1 210 578,95
  Profit for the Financial period 1 385 002,76 1 191 806,87 11 971,58 6 793,63
TOTAL EQUITY 18 571 338,77 18 382 740,40 17 718 201,11 17 730 157,53
         
MINORITY INTEREST 0,00 0,00 0,00 0,00
GROUP RESERVE 28 004,63 28 004,63 28 004,63 28 004,63
         
LIABILITIES        
    Non-current Liabilities 6 414 250,00 6 449 000,00 21 212 000,00 18 815 000,00
    Current Liabilities 30 291 429,06 32 922 322,92 14 418 016,32 8 592 882,75
TOTAL LIABILITIES 36 705 679,06 39 371 322,92 35 630 016,32 27 407 882,75
TOTAL EQUITY & LIABILITIES 55 305 022,46 57 782 067,96 53 376 222,06 45 166 044,91
*Full-year figure        

 

INCOME STATEMENT Q1-Q3 2015 Q3 2015 Q2 2015 Q1 2015 2014*
TURNOVER 8 771 001,11 3 237 841,82 2 902 772,65 2 630 386,65 9 900 552,63
Other operating income 1 350 698,91 -137,05 1 350 675,47 160,48 4 510,59
Materials and services -30 157,31 -6 020,43 4 096,70 -28 233,58 -91 137,34
Personnel costs -1 171 227,95 -235 740,28 -454 205,03 -481 282,64 -1 433 396,14
Depreciation -288 482,94 -97 327,65 -97 327,65 -93 827,64 -680 040,34
Other business-related costs -4 351 089,13 -1 616 951,16 -1 450 485,60 -1 283 652,37 -5 152 751,39
EBIT 4 280 742,70 1 281 665,26 2 255 526,54 743 550,90 2 547 738,01
Financial income and expenses -2 895 739,93 -1 088 469,36 -1 075 691,25 -731 579,32 -2 623 187,76
EBT 1 385 002,76 193 195,89 1 179 835,29 11 971,58 -75 449,75
Tax 0,00 0,00 0,00 0,00 82 243,38
Net Profit 1 385 002,76 193 195,89 1 179 835,29 11 971,58 6 793,63

The interim financial figures provided are unaudited, and based on the Company management’s estimates of the situation with the information currently available and planned development. The estimates include, for instance, planned and partially realized one-time costs, investments, amortization and depreciation, financial and other costs. Calculated taxes, which have not been finalized at this point, and impairment of goodwill are not included in the interim figures. Unexpected events, decisions by authorities, service providers, market disturbances and other factors may affect the actual financial figures significantly compared to these estimates. The reader is advised to read the 2014 annual review and financial statement for the latest audited figures and more information about the Group. 

 

Events after the period

Euroloan announced a deal with an undisclosed global investment firm, of the sale of up to 300 million euro in consumer receivables during the following 2 years, which secured the external funding for Euroloan Group. Tommi Lindfors, Chairman of Euroloan, commented: “Receivables that Euroloan’s Consumer Finance business generates can now be sold directly, for cash, at a good rate, freeing up capital and greatly increasing our capital turnover rate and growth potential. This deal enables us to focus on our core strengths, using our state-of-the-art, fully automated lending systems to generate much bigger volumes and getting new customers. We have now secured most of our planned funding base of EUR 100 million. Having ample funding, we can leverage our superior scalability and the low transaction cost we have achieved through automation and using the best financial technology available. The main factor limiting our growth is now solved, and there is virtually no limit on how much we can grow during the next couple of years. As always, we will maintain strict scoring and customer selection criteria to ensure strong performance.”

Finstar Financial Group, an international Private Equity Group, announced on 18th November 2015 that the Group has acquired an equity stake in Euroloan Group PLC (“Euroloan”), a rapidly growing international finance company. (The recent announcement about the deal by Euroloan unfortunately had the wrong date). Along with the acquisition, Finstar provides EUR 15 million funding facility. Euroloan intends to use the funds to strengthen and speed up the FinTech products and services` development. Finstar has also the option to further increase its equity to a significant level. The new partnership will see Finstar and Euroloan share expertise that will benefit both companies as they strengthen each other’s positions in the FinTech sector and Euroloan's expansion into North European markets.

Nick Jordan, CEO of Finstar, commented: “Over the years Finstar has developed substantial expertise and valuable relationships in the FinTech industry. Euroloan is a rapidly growing FinTech company with impressive technical capabilities, an experienced management team, a unique business model and significant international growth potential. The company matches our strategic focus perfectly and we look forward to contributing to its development and delivering exceptional results.”

Mr. Lindfors continued: “The development of a partnership with Finstar is a natural step towards expanding Euroloan’s horizons and taking us to the next level of our development. Finstar is a pioneer in the adoption of innovative, cutting-edge technology which it successfully implements in very competitive financial markets to develop thriving FinTech businesses. Finstar’s financial strength and invaluable experience in the FinTech space will enable Euroloan to focus on further expansion while maintaining its financial stability. This deal secures additional equity so that we can utilize all the external funding we need to fuel growth and at the same time maintain high solidity.” 

Euroloan is considering applying for an EU banking license and assessing the effects of a public listing. Samuli Korpinen, CEO of Euroloan Group states: “We have now secured our target of 100 million EUR in funding that we set out to do in 2014. Our excellent solidity and availability of external funding have opened up interesting new options for further growth.”

 

Management’s outlook

Total income for the entire financial year is expected to be markedly higher than for 2014. The deals made are expected to have a noticeable effect on the income statement of Euroloan Group PLC. Higher lending volumes, which are made possible with an increased funding base, are expected to improve long-term profits. Turnover per lending volume will decrease somewhat, while financing costs per lending volume will decrease significantly. With current receivables being sold after origination the capital turnover rate of the Group is also expected to increase substantially. This means that the fourth quarter figures will not be directly comparable with previous quarters due to the change in the business model. The full impact of the change in business model will be evident during 2016.

 

Euroloan Group PLC (Euroloan) is a rapidly growing international finance group specialized in financial technology (FinTech). The group’s headquarters are located in Helsinki, Finland, with offices in Stockholm, Sweden and Warsaw, Poland. Euroloan has developed the most efficient financing business models and systems in the market, since the company was established in 2007. Euroloan’s fully automated and internationally scalable cloud banking services provide real-time credit solutions for consumers and E-Commerce. More information about Euroloan Group is available at www.euroloan.com, Finland www.euroloan.fi, Poland www.euroloan.pl and in Sweden on www.euroloan.se.

 

         For more information, please contact:
         Jonas Lindholm
         Euroloan Group PLC
         Tel +358 10 217 1003