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Private and Confidential
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Company Overview
Description
AlphaCredit is one of the fastest-growing financial technology companies in Latin America that offers (a) consumer loans through
(i) Payroll Deduction Loans (“PDL”) and (ii) Electronic Debit Loans (“EDL”) and (b) financing solutions to small and medium size
companies (“SMEs”)
AlphaCredit’s business lines
AlphaCredit’s consumer lending geographical
footprint is managed through:
• +215 branches in Mexico and +37 branches in
Colombia
• +2,800 sales force agents in Mexico and +1,320
in Colombia
Headquarters
AlphaCredit’s SME lending provides two major
financial solutions to SMEs:
• operating and financial leases, and
• A/R financing (direct factoring) and supply
chain financing (reverse factoring)
• Working capital loans
Gross portfolio evolution (MXN$ mm)
Consumer loans
93.6%
SMEs loans
6.4%
2.6%Factoring loans
2.2%Leasing loans
77.0%PDL - Mexico
11.9%PDL - Colombia
4.7%EDL loans
1.7%Other loans1
1,694
4,676
6,0836,481
7,313
8,174
8,733
2015 2016 2017 1Q'18 2Q'18 3Q'18 4Q'18
Source: Alpha Holding’s non-audited financial information as of December 2018
Note: Total Portfolio considers Leasing portfolio included as PP&E in the Company’s Balance Sheet since 2017
2
MEX
COL
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AlphaCredit timeline
AlphaCredit stand-alone total cumulative disbursed portfolio (MXN$ mm)
Source: Alpha Holding’s non-audited financial information as of December 2018 1 Considers Leasing portfolio included as PP&E in the Company’s Balance Sheet
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
Jun-11 Nov-11 Apr-12 Sep-12 Feb-13 Jul-13 Dec-13 May-14 Oct-14 Mar-15 Aug-15 Jan-16 Jun-16 Nov-16 Apr-17 Sep-17 Feb-18 Jul-18 Dec-18
AlphaCredit disburses
its first PDL loan
AlphaCredit has raised more than US$1.1 bn in
funding with local and international investors,
financial institutions and the public markets
Interest Income
Gross Loans 1
Total Assets
Book Value
2015 – 2018 CAGR
71.2%
72.7%
57.4%
25.4%
AlphaCredit’s expansion
to Colombia
Acquisition of:
Acquisition of:
AlphaCredit introduces
Electronic Debit Loans
AlphaCredit begins Factoring
& Leasing operations
Acquisition of:
Alpha Holding issues
US$300 mm International bond due 2022
AlphaCredit issues MXN$1,800 mm on-asset
securitization in the
Mexican Stock Exchange (BMV)
Origination 2.0 pilot program
AXS Fintech App launch
3
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4
Portfolio breakdown as of December 2018
4Q18 (MXN mm) Consumer MexicoConsumer
ColombiaFactoring & Leasing Total
Key financial figures:
Total Income 806 74 38 918
NIM1 45.5%² 47.8%² 74.7%² 46.9%²
PDL Mexico EDL PDL Colombia Factoring Leasing
Interest rate 43.1% 75.2% 26.2% 19.5% 22.0% 41.5%
NPL % ratio by product 2.8% 11.8% 2.3% 1.1% 0.0% 3.0%
Portfolio breakdown:
% of Interest income 4Q183 76.0% 7.6% 8.6% 1.5% 3.4% -
% of Origination 4Q18 44.1% 9.3% 28.5% 17.0% 1.2% -
% of Total Portfolio 4Q183 77.0% 4.7% 11.9% 2.6% 2.2% -
Source: Alpha Holding’s non-audited financial information as of December 2018 1 Financial margin divided by Interest income plus fee income; 2 Adjusted by negative carry attributable to financial expense from excess cash; 3 Does not consider Structured loans and Working capital
loans to AC´s main PDLs brokers that use funds to originate PDLs for AC (the Company does not offer these products anymore)
Private and Confidential
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Source: Alpha Holding’s non-audited financial information as of December 2018 1 Federal refers to government agreements with national presence such as PEMEX or IMSS
5
Portfolio breakdown as of December 2018 (cont’d)
Consumer Loans portfolio evolution (MXN$ mm)
Portfolio breakdown:
Portfolio evolution:
PDL Mexico
4,192 4,967
6,720
2016 2017 2018
62%16%
15%
6% 1%
Federal ¹
Education
Health
Government
Others
41.9%
43.8%
43.1%
2016 2017 2018
Interest Income Rate APR Interest Income Rate
PDL Colombia
119
476
1,041
2016 2017 2018
62%12%
11%
15%
Pensioners
Education
Government
Others
29.4%
30.4%
29.6%
2016 2017 2018
EDL Mexico
99
232
410
2016 2017 2018
61.1% 61.0%
75.2%
2016 2017 2018
64%
36%Pensioners
Retirees
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6
Portfolio breakdown as of December 2018 (cont’d)
SMEs Loan portfolio evolution (MXN$ mm)
LeasingFactoring
13
224 231 242
305
2016 2017 1Q'18 2Q'18 3Q'18 4Q'18
343
3
64
102
158180 188
2016 2017 1Q'18 2Q'18 3Q'18 4Q'18
69%
31%AR Factoring
Supply Chain Factoring
APR APR
31.1%
32.0%
33.5%
2016 2017 2018
48%36%
10%
6%
M&E
Transportation
IT
Furniture
Portfolio evolution¹:
Portfolio breakdown:
Source: Alpha Holding’s non-audited financial information as of December 2018 1 Considers Factoring committed lines
27.0% 27.2%
30.3%
2016 2017 2018
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Gross Portfolio (MXN$ mm) NPLs Ratio (%)
Interest Income (MXN$ mm) Net Income (MXN$ mm)
Financial highlights
2016 2017 1Q'18 2Q'18 3Q'18 4Q'18
Others¹
F&L
EDL
PDL-Col
PDL-Mx 7,313
6,481
8,174
8,733
4,676
6,083
853
1,849
2,628
522716
2016 2017 2018 4Q'17 4Q'18
Others¹
F&L
EDL
PDL Col
PDL Mx
33
Average Interest Income Rate (%)
26.8% 34.3% 35.5% 35.0% 33.9%
53
115
145
448
15
113
2016 2017 2018 2018 adj 4Q'17 4Q'18 adj
Source: Alpha Holding’s non-audited financial information as of December 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 Calculated as annualized
Interest Income divided by average Portfolio; ³ Adjusted by negative carry attributable to financial expense from excess cash
7
3.7% 3.7%
3.1% 2.9%3.3%
3.0%
2016 2017 1Q'18 2Q'18 3Q'18 4Q'18
2
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Credit highlights
43.1%
37.9% 35.2%
31.1%
26.0% 25.9%
2016 2017 1Q'18 2Q'18 3Q'18 4Q'18
Capitalization Ratio¹
OPEX as % of Total Income
39.8%36.8%
29.1%
34.8%
26.0%
2016 2017 2018 4Q'17 4Q'18
82.7% 82.2% 54.0% 103.0% 54.6%
Efficiency Ratio4
Net Financial Leverage2
2.8x3.1x
3.5x
4.0x
4.5x
5.0x
2016 2017 1Q'18 2Q'18 3Q'18 4Q'18
ROAA6
0.7% 0.9% 0.9%
2.7%
0.4%
2.6%
2016 2017 2018 2018 adj 4Q'17 4Q'18adj
Coverage Ratio3
128.9%120.7%
106.9%113.2% 114.6%
122.2%
2016 2017 1Q'18 2Q'18 3Q'18 4Q'18
ROAE7
3.4% 5.3%
6.3%
19.6%
2.7%
20.6%
2016 2017 2018 2018 adj 4Q'17 4Q'18adj
Source: Alpha Holding’s non-audited financial information as of December 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 Operating Expenses for the period divided by the adjusted Financial Margin of the period; 5 Adjusted by negative carry attributable to financial expense from excess
cash; 6 Calculated as YTD Net Income divided by average Total Assets; 7 Calculated as YTD Net Income divided by average Shareholders’ Equity
5 5
8
5 5
5 5
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Total Debt – Maturity Profile
Type of Debt Fixed rate vs. Floating rateSecured vs. Unsecured
44.6%
23.9%
13.6%
14.6%
3.2%
International
Notes
Bank Credit
Lines
Asset
Securitization
International
Funds
OthersTotal = MXN$13,204 mm1
55.7% 44.3%
Unsecured
Secured 86.4%
13.6% Fixed Rate
Floating
Rate
1,090 1,366 1,556
9,192
2019 2020 2021 2022 - Older
International Notes Bank Credit Lines Asset Securitization International Funds Others
100% of USD denominated debt is hedged via interest rate swaps and floating rate debt is fully hedged with an interest rate cap
Source: Alpha Holding’s non-audited financial information as of December 2018 1 Does not include accrued interest, intercompany loans and capitalized interest; 2 100% of the Company’s Floating Rate is hedged
9
AlphaCredit’s debt profile as of December 2018
70% of principal
amortizations are due in
2022 or later
2
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Income Statement
Historical Income Statement
2018 2018 Adjusted 2017
(MXN$ million) 1Q’18 2Q’18 3Q'18 4Q’18 FY2018 4Q’18 FY2018 4Q’17 FY2017
1 Interest income 599 654 659 716 2,628 716 2,628 522 1,849
2 Fee income 68 62 204 202 536 202 536 68 239
3 Interest expense (408) (458) (492) (534) (1,893) (480) (1,460) (369) (1,027)
4 Fee expense (10) (12) (6) (8) (35) (8) (35) (21) (104)
5 Financial margin 249 246 364 376 1,235 430 1,668 200 956
6 Allowance for loan losses (37) (36) (33) (31) (137) (31) (137) (40) (78)
7Financial margin adjusted for credit risks
212 210 332 345 1,098 399 1,530 160 879
8 Administrative expenses (227) (208) (220) (231) (885) (231) (885) (20) (768)
9 Other income, net 16 0 (23) (8) (15) (8) (15) 51 25
10 Income before income taxes 1 2 89 106 198 160 631 5 135
11 Income tax benefit (expense) (1) 0 (27) (32) (59) (48) (189) 1 (37)
12 Non-controlling interest 4 1 0 1 6 1 6 9 18
13 Net Income 4 3 62 75 145 113 448 15 115
Source: Alpha Holding’s non-audited financial information as of December 2018
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Income Statement (cont’d)
2018
(MXN$ million) 2015YE 2016YE 2017YE 2018YE 2018YE (Adj.)
1 Interest income 524 853 1,849 2,628 2,628
2 Fee income 135 195 239 536 536
3 Interest expense (251) (448) (1,027) (1,893) (1,460)
4 Fee expense (93) (87) (103) (35) (35)
5 Financial margin 316 514 957 1,235 1,668
6 Allowance for loan losses (35) (107) (78) (137) (137)
7 Financial margin adjusted for credit risks 281 407 880 1,098 1,530
8 Administrative expenses (103) (417) (768) (885) (885)
9 Other income, net 537 12 24 (15) (15)
10 Income before income taxes 715 2 135 198 631
11 Income tax benefit (expense) (49) 29 (37) (59) (189)
12 Non-controlling interest (8) 21 18 6 6
13 Net Income 658 53 115 145 448
Source: Alpha Holding’s non-audited financial information as of December 2018
Historical Income Statement
11
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Balance Sheet
Historical Balance Sheet
2018
(MXN$ million) 2015YE 2016YE 2017YE 1Q’18 2Q’18 3Q’18 4Q’18
1 Cash and cash equivalents 344 507 4,920 3,446 4,201 3,114 1,851
Cash and cash equivalents 1,952 1,135
Reserved Cash 698 404
Cash in-transit 463 311
Performing Loan Portfolio:
2 Consumer Mexico 1,338 4,1251 4,974 5,220 5,886 6,465 6,896
3 Consumer Colombia 0 119 473 539 717 881 1,017
4 Factoring 0 9 156 175 153 196 221
5 Others 320 252 188 247 187 184 148
6 Total Current Portfolio 1,658 4,501 5,792 6,181 6,943 7,726 8,282
7 Non-Performing Loan Portfolio 36 171 228 198 212 269 263
8 Total Portfolio 1,694 4,672 6,020 6,379 7,155 7,994 8,545
9 Allowance for loan losses (46) (221) (275) (211) (239) (308) (321)
10 Net loan portfolio 1,648 4,452 5,745 6,167 6,916 7,686 8,224
11 PP&E Leased 0 3 64 102 158 180 188
12 Contract Agreements 1,971 3,712 3,712 3,712 3,712 3,712 3,712
13 Prepaid Fees 20 107 159 209 244 256 280
14 Other accounts receivables 123 636 1,173 1,353 1,429 1,383 1,517
15 Taxes 110 174 137 128 191 312 163
16 Other Assets 133 429 550 458 657 695 1,088
17 Total assets 4,349 10,019 16,460 15,576 17,508 17,338 17,023
Loans from banks and other entities:
18 Short-term Debt 203 1,982 1,518 1,692 1,868 1,393 1,397
19 Long-term Debt 1,729 4,178 10,768 9,657 11,354 11,327 11,866
20 Other Account Payables 438 629 823 737 959 1,058 323
21 Total Taxes 745 1,160 943 931 959 1,145 1,112
22 Other liabilities 86 55 98 281 92 286 63
23 Total liabilities 3,201 8,004 14,150 13,296 15,232 15,209 14,761
24 Total shareholders’ equity 1,148 2,015 2,310 2,280 2,276 2,129 2,262
25 Total liabilities and shareholders’ equity 4,349 10,019 16,460 15,576 17,508 17,338 17,023
Source: Alpha Holding’s non-audited financial information as of December 2018
12
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Appendix
13
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14
Cash reconciliation
(MXN$ million) 3Q18
1 Cash and cash equivalents 1,952
2 Reserved Cash 698
3 Cash in-transit 463
4 Total cash for the period 3,114
(MXN$ million) 4Q18
1 Cash and cash equivalents 1,134
2 Reserved Cash 404
3 Cash in-transit 311
4 Total cash for the period 1,851
Cash and Cash Equivalents Cash available for new loan origination
Provisions Cash provisioned for debt repayment ( e.g. Interest payment to bondholders) and collateral
Working capital Cash in-transit in our collection master trust
Cash consolidation reconciliation
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Understanding our Balance Sheet: Contract Agreements overview
Contract Agreements overview
PDL Mexico origination YTD 2018: 2,285 MXN$mm
Existing contract agreements
Consolidated sales force platform
Description◼ Contract agreements with government entities enable
AlphaCredit to originate and collect payroll deduction loans with such government entities’ employees
Key characteristics
◼ Origination is targeted to government employees
◼ Government entities deduct principal and interest amortizations from our loans directly from the Borrowers paycheck and remit it to us
◼ Amortizations are paid regardless of the status of the government agreement
Creation and renewal of withholding Agreements
◼ Opening a new contract agreement takes a long time, and even more to fully penetrate the employee base
◼ Term of the contracts varies among the agreements
Contract agreements
owned
◼ AlphaCredit has a total of 369 contract agreements
◼ Existing contracts allow AlphaCredit to reach approximately 4.5 million government employees
108 C.A. acquired 157 C.A. acquiredTotal 369 contract
agreements
Consolidated
Mobile units
◼ Used to gain access to remote areas
◼ 7 sales persons
◼ Avg. origination of Ps$750k/month
◼ +22 operational units in Mexico
Main branch / Core branch
◼ Located in capital cities
◼ Complete staff
◼ Min. origination of Ps$1.5-2mm/month
◼ +92 branches in Mexico
◼ Located in smaller towns
◼ Reduced staff
◼ Min. origination of Ps$750k-1mm/month
◼ +12 branches in Mexico
Modular branch
Nodes
◼ Used for making an assessment before placing a Modular or Core branch
◼ One sales person
◼ Min. origination of Ps$350k/month
◼ +85 Nodes in Mexico
CAGR ‘15-’18: 70.11%
463
1,151
1,929
2,285
2015 2016 2017 2018
Total Credit acquisition
(December 2015)
Finmart acquisition in
(September 2016)
15
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Disclaimer
The material that follows is a confidential presentation of general background information about Alpha Holding, S.A. de C.V.
(“AlphaCredit”, “AC” or “the Company”), 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 a solicitation or an offer to buy or sell any securities and should not be
treated as giving investment advice to potential investors. The information contained herein is in summary form and does not
purport to be complete. No representations or warranties, express or implied, are made concerning, and no reliance should be
placed on, the accuracy, fairness, or completeness of this information. Neither AlphaCredit nor any of its affiliates accepts any
responsibility whatsoever for any loss or damage arising from any information presented or contained in this presentation. The
information presented or contained in this presentation 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 its affiliates 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 current views and/or expectations of AlphaCredit and its management with respect to its
performance, business and future events. Forward-looking statements include, without limitation, any statement that may predict,
forecast, indicate or imply future results, performance or achievements, and may contain words like “believe”, “forecast”,
“estimate”, “anticipate”, “expect”, “envisage”, “intend”, “plan”, “project”, “target” or any other words or phrases of similar
meaning. Such statements are subject to a number of risks, uncertainties and assumptions. Forward-looking statements are not
guarantees of future performance and our actual results or other developments may differ materially from the expectations
expressed in the forward-looking statements. As for forward-looking statements that relate to future financial results and other
projections, actual results may be different due to the inherent uncertainty of estimates, forecasts and projections. Because of
these uncertainties, potential investors should not rely on these forward-looking statements. Neither AlphaCredit 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 this presentation 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, as amended. 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 will be made solely by means of a confidential offering memorandum. Such
confidential offering memorandum will contain detailed information about AlphaCredit, and its subsidiaries, its business and
financial results, as well as its financial statements. This presentation does not constitute an offer, or invitation, or solicitation of an
offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any
contract or commitment whatsoever. This document has not been approved by the U.S. Securities and Exchange Commission, nor
any other competent 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, industry publications and publicly available information. Notwithstanding any investigation
that AlphaCredit or any affiliate may have conducted with respect to the market 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 without AlphaCredit’s prior written consent.
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