Eleving Group reports record profitability as a result of steady operational and financial performance. The following operational and financial highlights have been provided by Eleving Group. The company has also published the full report on its website.
Operational and strategic highlights
- Record-high twelve-month sales (ended 31 December 2021) achieved by best-to-date issuances (€106 million) in Q4 2021, marking a year-on-year growth of 108%
- Substantial increase in performance levels (Key Performance Indicators):
- annual revenue up by 55% YOY, surpassing €150 million in 2021
- annual adjusted EBITDA up by 57% YOY, reaching €58.9 million in 2021
- net profit for the period at an all-time high, hitting €8.8 million
- Continued diversification of business and a balanced revenue stream from the 3 core business lines:
- Flexible lease and subscription-based products contributed €26.7 million to the annual revenue – a more than twofold increase year-on-year (€7.9 million in 2020). Primarily driven by growth in motorcycle-taxi financing in Kenya and Uganda, and successful rollout of rental and subscription products in the Baltics.
- Lease and leaseback product revenue at a stable €53.3 million, bouncing back from the slowdown caused by the COVID-19 pandemic in 2020, as well as rationalization of some markets over the 2020–2021 period.
- Consumer lending products generated €61 million in revenue, an all-time high and a direct result of the substantial portfolio growth throughout the year, mainly driven by the introduction of longer maturity and higher ticket installment loans and credit line products across multiple consumer finance markets.
- Continued digitalization and automation of the processes and sales channels, facilitating processing of more than 200 000 applications, and scoring of more than 100 000 clients per month
- Launching of the brand-new car subscription product in Latvia in Q4 2021, providing customers with an opportunity to drive a new car the same day and cover all vehicle rental and maintenance costs by a single monthly payment. Customer can choose a subscription period of 1 to 36 months
- With the help of sustainability consultants, Eleving Group conducted a materiality analysis among its stakeholders to contribute to synchronizing the Group’s stakeholder expectations with the current and forthcoming regulatory requirements. The Group’s headquarters implemented a carbon footprint assessment to minimize the climate impact, and will proceed with offsetting activities in 2022 to become a carbon-neutral company
Financial highlights and progress
- Record-high quarterly EBITDA of €49.0 million (12M 2020: €45.4 million) and adjusted €58.9 million.
- Net Profit before FX: €7.5 million (12M 2020: €14.3 million) and adjusted €17.4 million.
- Net Profit after FX: €8.8 million (12M 2020: €1.1 million loss) and adjusted €18.7 million.
- Record-high portfolio of €244.7 million, a €15.7 million increase QOQ. Eleving Vehicle Finance accounted for €183.3 million, Eleving Consumer Finance for €61.4 million.
- Eleving Group’s funding maturity profile extended by five more years due to successful Eurobond issuance and settlement on 18 October 2021. New secured Eurobonds were issued at par with an annual interest rate of 9.5% and maturity in 2026.
- Fitch Ratings assigned a senior secured debt rating of ‘B-(EXP)’ with a Recovery Rating of ‘RR4’ to Eleving Group’s new Eurobonds.
- Additionally, Eleving Group announced an issuance and settlement of €25 million subordinated bonds in order to refinance existing shareholder loans as well as further strengthen Group’s capital structure.
“We began 2021 with a clear goal of keeping our strategic focus on the Group’s existing markets and pursuing steady growth. In retrospect, I can conclude that not only was our strategy accomplished but also surpassed. Sustained quarter-on-quarter growth of our performance levels is the best evidence for that. Our sales, annual revenue, and EBITDA have grown by at least 50%, proving strength of the Eleving Group business model. Effective risk management through automated solutions, state-of-the-art IT systems, and established sales channels were the core pillars in achieving results.
While keeping our focus on the existing geographies, Eleving Group also launched a variety of new products. From subscription and rental services in the Baltics to long term credit line solutions in Moldova. The successful launch of these products shows the company’s ability to meet the changing customer needs and will play an important role in strengthening the Group’s leading market position in the future. Throughout the year, we recorded strong quarter-on-quarter growth in the productive lending operations in Africa. By providing local entrepreneurs with affordable access to owning a moto-taxi we have created thousands of jobs and improved the drivers’ income.
During the last year, Eleving Group has laid a firm foundation for sustainable operations following ESG principles, and we are proud of the tangible results achieved across multiple social and environmental initiatives. Going forward, we aim to incorporate more and more sustainability-focused products into our business and focus on improving our non-financial reporting practices.”
“2021 marks the best year in Eleving Group’s 9-year history since inception in 2012. The following achievements across three main areas are worthy of mention.
First, the Group’s operational excellence and healthy balance sheet. Both have been forged by the Group’s adjusted EBITDA of EUR 58.9 million, exceeding the previous year’s result 1.6 times.
Second, in 2021, the Group refinanced all of its bond liabilities by issuing new Latvian bonds in the amount of €30 million and refinancing previous Eurobonds with a new senior secured bond simultaneously raising more capital, which resulted in a new €150 million Eurobond with maturity in 2026. Year 2021 was closed with the issuance of subordinated bonds worth €25 million, which enjoys the equity credit from the rating agency’s perspective. It is worth mentioning that the extraordinary fundraising year left a non-recurring refinancing expense of €5.7 m in the Profit and Loss statement that we consider money well spent.
Third, we have spent a considerable amount of time optimizing our balance sheet; as a result, we have either divested or written off several of our rundown markets freeing up resources for the active ones. This repositioning took a one-time toll on our Profit and Loss statement in the amount of €4.5 million as an extraordinary expense. We have also been successful at monetizing a number of receivables on our balance sheet ahead of time, reinvesting them in productive assets—our net loan portfolio, which now stands at €244.7 million.
To conclude, a one-time extraordinary expense of more than €10 million has not affected the profitability of the Group, which has achieved €9.3 million of total comprehensive income in 2021, thus positioning itself for an operational and financial uplift in 2022.”
About Eleving Group
Eleving Group was founded in 2012 in Latvia and joined the Mintos marketplace in 2015, originally offering loans for investment from Latvia. Since then, it has placed loans on the marketplace from 14 countries in the Baltics and Central, Eastern, and South-Eastern Europe. Operating regions also include the Caucasus and Central Asia, as well as Eastern Africa. Up to date, the company has issued over € 710 million in loans and has a net loan portfolio of over € 220 million.
Some of the equity investors of Eleving Group and Mintos overlap.
