Eleving Group S.A.: Eleving Group reports unaudited results for the three months ended on 31 March 2023

Stable portfolio while maintaining robust profitability
Operational and Strategic Highlights

• The Group closed the first quarter of 2023, recording steady financial performance as revenues kept the same level as in 1Q 2022, and reached EUR 44.7 mln. Over the last three months, the net portfolio remained stable and totaled EUR 290.3 mln. The relatively slower quarter was anticipated given the seasonality of the financing business, and signs of an economic slowdown were observed in multiple jurisdictions in late 2022, resulting in consumers postponing larger purchases in fear of rising commodity prices amid the winter heating season.
• Continued diversification of business operations and a balanced revenue stream from all three core business lines:
  • Flexible lease and subscription-based products contributed EUR 12.7 mln to the 3M 2023 revenues—up by 19.5% compared to 3M 2022, but down by 5.0% QOQ. The negative trend in revenues was largely attributable to political protests in Kenya that had a short-term adverse effect on issuance volumes and decreasing stock of rental vehicles in Latvia.
  • Traditional lease and leaseback products contributed EUR 17.0 mln to the 3M 2023 revenues—up by 12.4% compared to 3M 2022 and up by 2.1% QOQ. The respective revenue growth was mainly attributable to an upward reviewed pricing and the successful portfolio growth in Georgia and Lithuania.
  • Revenues from the consumer loan segment contributed EUR 13.2 mln to the 3M 2023 revenues—down by 26.0% compared to 3M 2022, but stable QOQ. The negative trend in consumer loan revenues mainly stemmed from the run-down of the Ukrainian portfolio.
• Midst Q1, the premium vehicle financing brand Primero was rolled out in Lithuania, thus making the product available in all three Baltic countries.
• In early 2023, the Group won 1st place in the prominent Nasdaq Baltic Awards category of Best Investor Relations on the First North Bond List. The award is presented every second year as part of the Nasdaq Baltic Awards ceremony, which celebrates outstanding achievements by Nasdaq Baltic-listed companies in the areas of transparency, sound corporate governance, and investor relations. Also, in Q1, Eleving Group was listed in 15^th place among the best employers in Latvia in the CV-online's research in the category “On Top of Mind.” The Group was the highest-ranked Fintech company.
• During Q1, Eleving Group continued its course towards a more sustainable future and achieved several milestones in line with its ESG strategic objectives. The most noteworthy achievements in the ESG space included the Group’s participation in carbon offsetting campaigns in Kenya and Ethiopia to compensate for the carbon footprint caused by the operations of the Group’s headquarters in Riga and Vilnius.

Financial Highlights and Progress

• Solid profitability as evidenced by:
  • Adjusted EBITDA of EUR 18.9 mln (3M 2022: EUR 16.4 mln).
  • Adjusted Net Profit before FX of EUR 7.3 mln (3M 2022: EUR 5.9 mln).
  • Adjusted Net Profit after FX of EUR 5.7 mln (3M 2022: EUR 4.3 mln).
• Stable net portfolio of EUR 290.3 mln; Eleving Vehicle Finance and Eleving Consumer Finance accounted for EUR 221.8 mln and EUR 68.5 mln, respectively.
• In Q1, the Group extended its local bond issuance program in Kenya with an aim to double the amount raised in 2022. At the end of Q1, the total amount raised equaled EUR 10.6 mln, representing an increase of EUR 3.3 mln compared to December 2022. Moving forward, the Group will seek to leverage similar opportunities, as it both bolsters the Group’s capital structure and mitigates the FX gap on the Group’s balance sheet stemming from asset and liability currency mismatch.
• The 3-year Latvian bond is set to mature at the end of Q1 2024, hence the Group currently considers a range of refinancing opportunities, with more detailed information to follow in the upcoming months.
• Given the stable financial performance and positive cash flow, for the very first time, the Group decided to return a part of its existing capital to its shareholders in the form of a dividend payout. The respective dividend payment was executed in early 2023, totaling EUR 5.1 mln.
• Q1 was closed with a healthy financial position, supported by the capitalization ratio of 25.6% (31 December 2022: 25.8%), ICR ratio of 2.4 (31 December 2022: 2.4), and net leverage of 3.5 (31 December 2022: 3.3), providing an adequate and stable headroom for Eurobond covenants.

Modestas Sudnius, CEO of Eleving Group, commented:  
“The first quarter of this year developed exactly as we had anticipated since the start of the year is always a bit slower in the mobility segment coupled with higher than usual utility bills that impacted personal spending priorities and consumption levels. Despite the challenges, we maintained the quality of the Group's portfolio, demonstrating that our strategy and business decisions can deliver high-quality results even in uncertain times. In the middle of last year, we de-emphasized our plans for significant growth and shifted our focus to business efficiency. The growth of the portfolio has indeed been slowed down, which negatively affects QOQ revenue, but at the same time, the company has maintained exceptional cost discipline and reviewed prices upwards in the majority of its car leasing product markets. All these actions allowed us to achieve higher efficiency ratios that align with the company’s strategy.
In the first months of 2023, we continued to maintain well-diversified operations, thus reducing business-related risks. We have launched near-prime car financing product in Lithuania under the Primero brand, while in Romania, we continue to digitize business operations to improve the customer onboarding process and overall experience. The general operational focus in 2023 remains on further process digitization and improvements to our existing products. Despite our more conservative business approach, we still aim to reach double-digit organic growth in the net loan portfolio by the end of the year. On top of that, with strong cash and equity position and well-diversified borrowing channels, the company is exploring potential portfolio purchases or business acquisitions in the market. 
We also remain focused on ESG, where we continue to pursue our long-term goals. This year we have offset our entire carbon footprint in the amount of 114tCO2 arising from the operations of our headquarters in Riga and Vilnius. This was achieved through participation in carbon offsetting projects in Kenya and Ethiopia. We are also finalizing the localization of the Group's financial literacy platform, which is already integrated into product pages in nine of our countries.”
Maris Kreics, CFO of Eleving Group, commented: 
“In the first quarter, we increased our adjusted EBITDA to EUR 18.9 mln, an increase of EUR 2.5 mln compared to the same quarter in 2022. The adjusted net profit before FX reached EUR 7.3 mln, an increase of EUR 1.4 mln compared to the respective period a year ago. The net portfolio remained stable, totaling EUR 290.3 mln. These results, during the overall challenging first months of the year, are evidence of prudent business management, proving that we are on a solid footing and well positioned for further controlled growth in the following quarters.
Throughout the first quarter, we have continued to diversify the risks within our portfolio and within to minimize currency mismatches. At the end of Q1, the total amount raised equaled EUR 10.6 mln, representing an increase of EUR 3.3 mln compared to December 2022.
Also, the 3-year Latvian bond is poised to reach maturity at the end of Q1 2024. Consequently, the Group actively evaluates various refinancing opportunities and anticipates disclosing further details in the forthcoming months.
At the same time, we are proud that our work in investor relations has been recognized on a pan-Baltic level, with Eleving Group receiving an award for Best Investor Relations among Nasdaq Baltic First North Bond list companies in February of this year.”
Full unaudited consolidated report on 3M period ended on 31 March: https://eleving.com/investors/
  
Conference Call: 
A conference call in English with the Group's management team to discuss the results is scheduled for 15 May 2023 at 15:00 CET. 

Link to register for a conference call: https://bit.ly/3p5Yulk  

Eleving Group 
Toms Vecvagars, Investor Relations Manager 
Email: toms.vecvagars@eleving.com 

About Eleving Group 
Eleving Group is a global multi-brand group established in 2012, operating in vehicle and consumer financing segments. Currently, the company has 12 markets of operations across three continents. The company has a portfolio of over 500 000 clients worldwide, and the total volume of loans issued exceeds EUR 1.2 billion. In 2020 and 2021, the Financial Times ranked Eleving Group among the Top 1000 fastest-growing FinTech companies in Europe. Currently, Eleving Group has more than 2600 employees. The company's bonds are listed on Nasdaq Riga and Frankfurt Stock Exchange. In 2023, Eleving Group received 1st place in Nasdaq Baltic Awards in the category of Best Investor Relations on the First North Bond List.
--
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.