Operational and Strategic Highlights  

• Following the best quarter this year, the Group closed the nine months with healthy financial performance. The nine-month revenue reached EUR 136.0 mln, up by 2.6% compared to the corresponding period last year. Meanwhile, the Group’s net portfolio landed at EUR 327.3 mln, showing a significant increase of around 11% QOQ. Excluding the integrated ExpressCredit business, the Group still recorded a healthy portfolio growth of 2.8% QOQ.
• Diversified business operations and a balanced revenue stream from all three core business lines:   
  • Flexible lease and subscription-based products contributed EUR 37.7 mln to the 9M 2023 revenues— a steady result compared to the 9M 2022. The steady volumes in absolute figures can be explained by the selling of the Renti Plus portfolio and a slight decline in income from motorcycle taxi loans, which is compensated by improving results from Renti Lithuania operations.
  • Traditional lease and leaseback products contributed EUR 51.0 mln to the 9M 2023 revenues— an unchanged result compared to the 9M 2022, mainly affected by Belarus portfolio run-down.
  • Revenues from the consumer loan segment contributed EUR 47.3 mln to the 9M 2023 revenues— up by 8.0% compared to 9M 2022, mainly driven by the integration of the Express Credit business and successful results from the consumer segment in the Balkans.
• The respective quarter is the first since the integration of the ExpressCredit business into the Group’s portfolio and operations. The new countries have already shown strong results in the first months, contributing to the Group’s net portfolio with EUR 26 mln, recording revenues of EUR 5.0 mln, EBITDA of EUR 2.9 mln, and comprehensive income of EUR 0.4 mln.
• In Q3, the Group introduced a new B2B car sales platform to make car purchases more accessible and faster for small and medium-sized businesses. At the end of Q3, the platform is live in Lithuania, with a goal to gradually localize it across other Group markets.
• In the ESG and sustainability area, Eleving Group continued its course to introduce electric motorcycle financing in Kenya, with over 150 units financed. The Group sees increasing interest from self-employed and SMEs; therefore, in the coming months, by increasing supply capacity, the company expects to intensify e-boda financing significantly. In addition, the Group is steps away from launching e-boda financing services in Uganda.
• During Q3, OX Drive, an electric car-sharing service with Tesla vehicles, has continued to show notable operational results. Since the launch of the OX Drive last summer, more than 35,000 customers have used the service, and they have commuted over 2.5 million kilometers on 64,000 journeys. In Q3, the company was exploring new avenues to attract external investment for further expansion, resulting in the allocation of EUR 2.8 mln for fleet development provided by Industra Bank in late October. 

Financial Highlights and Progress   

• Solid profitability as evidenced by:   
  • Adjusted EBITDA of EUR 58.5 mln (9M 2022: EUR 51.5 mln).   
  • Adjusted Net Profit before FX of EUR 23.5 mln (9M 2022: EUR 18.2 mln).  
  • Adjusted Net Profit after FX of EUR 19.4 mln (9M 2022: EUR 18.7 mln).   
• Increasing net portfolio of EUR 327.3 mln; Eleving Vehicle Finance and Eleving Consumer Finance accounted for EUR 227.1 mln and EUR 100.2 mln, respectively.  
• In Q3, the Group laid the groundwork for the new bond issue and further diversification of the Group’s funding structure and maturities. Investors were allowed to exchange or subscribe to the Eleving Group 2023/2028 senior secured and guaranteed bonds featuring a 13% coupon rate. As a result, Eleving Group issued bonds worth EUR 50 million with a maturity date in 2028.
• Alongside the Eurobond issue, a new local Kenyan 3Y bond program has been launched to attract up to EUR 12 mln in local currencies.
• In the meantime, the newly integrated ExpressCredit comes with a pre-funded business consisting of numerous funding channels such as impact funds, Mintos, and local bank borrowings. 
• The nine months of 2023, similarly to the previous ones, were again closed with a healthy financial position, supported by the capitalization ratio of 26.6% (31 December 2022: 25.8%), ICR ratio of 2.4 (31 December 2022: 2.4), and net leverage of 3.6 (31 December 2022: 3.3), providing an adequate and stable headroom for Eurobond covenants.   

Modestas Sudnius, CEO of Eleving Group, commented:

“Looking back at the last quarter, we see that Eleving Group has successfully managed the challenges faced by the global economy. We see that the business is stable, and that’s exactly what we wanted to achieve – to increase the quality of the portfolio and sustain a healthy growth pace. Given the rising inflation, we see that the payment discipline of our clients is slightly changing, but it does not have an impact on our portfolio at significant levels. The reason for that is the strategy we have set previously that is showing its effectiveness during the third and previous quarters of this year.

After a slightly slower first half, in the third quarter, we could see a gradual improvement in consumption figures in the markets we represent, which we see in an increase in the number of applications received and overall growth in the portfolio. Disregarding obtained markets, the net loan portfolio grew by close to 3% in the third quarter. Our consumer lending segment continues to show solid growth in Balkan markets, while the vehicle segment is picking up healthy dynamics again.

In Q3, as in previous ones, one of our key priorities was to streamline our business processes. We continued to improve our underwriting policy and further reviewed our administrative costs and pricing strategies. At the moment, I believe that we have done an excellent job in the areas listed above to successfully overcome the winter period, which often has a particular impact on customers and their ability to meet their obligations.

The main operational focus for the group in the third quarter was the integration of Express Credit – a consumer lender in the South African region, which Eleving Group obtained in July, into the Group’s systems and procedures. We aim to finish technical integration during this year and expect a noticeable increase in efficiency and cost-effectiveness after this is done. Newly obtained businesses have great potential for growth in the near future, and, already in the third quarter, it has delivered a sizable addition to Eleving Group’s results.

At the same time, we have not stopped pursuing our green course. In Kenya, our e-boda business is gathering momentum, and we see increasing interest in electric mobility from local consumers and small businesses. In addition, we are a few steps away from launching an identical service in Uganda. Meanwhile, OX Drive has continued to perform strongly in the third quarter, and it is clear that green car-sharing is becoming a preferred way of transport for many people in Latvia.”

Maris Kreics, CFO of Eleving Group, commented:

“During the third quarter, we continued to deliver strong results in key business areas. The Group generated revenues of EUR 142.5 mln, with a net portfolio of EUR 327.3 mln. The corresponding adjusted EBITDA for this period stood at EUR 58.5 mln, compared to EUR 51.5 mln from the previous year. Furthermore, the adjusted net profit before FX reached EUR 23.5 mln, an increase of EUR 5.3 mln compared to the nine-month period of 2022.

This is the first quarter in which we have fully integrated ExpressCredit into our portfolio and operations. ExpressCredit has contributed to the Group’s overall result with an additional net loan portfolio of EUR 26 mln, revenues of EUR 5.0 mln, EBITDA of EUR 2.9 mln, and comprehensive income of EUR 0.4 mln. This is the performance we expected from the newly integrated business, and we remain optimistic about business prospects in the coming quarters.

During the third quarter, a strong emphasis was placed on further diversification of our funding structure. We laid the foundations for the bond issue concluded in October this year, where investors were offered an exchange of Mogo AS 2021/2024 bonds and a subscription for the new Eleving Group 2023/2028 senior secured and guaranteed bonds with a coupon rate of 13%. As a result, Eleving Group issued bonds worth EUR 50 mln with maturity in 2028. Volume-wise, this already is one of the largest corporate public bond offerings carried out in the Baltics in recent years. Additionally, we see this issue as a great success for further diversification of our funding structure, given that we have onboarded close to 2000 new investors from numerous geographies without large single investor concentration. Also, the new bonds will improve our debt maturity profile. We have reached the point where the next significant maturity is three years away, which gives us considerable time to prepare for it.

In the near future, we plan to attract new debt service providers – local and international investors – to diversify our lender base in markets such as Botswana and Namibia. Finally, in Q4, we plan to strategically deploy newly raised proceeds in accordance with Eleving Group’s 2023/2028 bond prospectus, mainly to refinance Mogo AS 2021/2024 bonds and to cover other Group liabilities.”

Full unaudited consolidated report on the 9M period ended on 30 September: https://eleving.com/investors/