2Q20 Earnings Presentation August 4, 2020
Disclaimer IMPORTANT: You must read the following information before continuing to the rest of the presentation, which is being provided to you for informational purposes only. Forward-Looking Statements This presentation contains forward-looking statements. These forward-looking statements include assumptions about customer demand, competitive landscape and product trends, expectations for the ongoing expansion of the Verge Credit product and contributions from ancillary card products and Katapult and our assumptions about marketing and discretionary expenses. In addition, words such as “guidance,” “estimate,” “anticipate,” “believe,” “forecast,” “step,” “plan,” “predict,” “focused,” “project,” “is likely,” “expect,” “intend,” “should,” “will,” “confident,” variations of such words and similar expressions are intended to identify forward-looking statements. Our ability to achieve these forward-looking statements is based on certain assumptions and judgments, including the effects on our business of the COVID-19 pandemic, its impact on our ability to continue to service our customers, our revenue and overall financial performance and the manner in which we are able to conduct our operations, the performance of Katapult, increases in charge-offs in light of the impact of the COVID-19 pandemic, our ability to execute on our business strategy and our ability to accurately predict our future financial results. These assumptions and judgments may prove to be inaccurate in the future. These forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. There are important factors both within and outside of our control that could cause our actual results to differ materially from those in the forward-looking statements. These factors include the impact of COVID-19 on the macro-economic environment and how that may impact our customers and other parties with whom we do business, our dependence on third-party lenders to provide the cash we need to fund our loans and our ability to affordably access third-party financing; errors in our internal forecasts; our level of indebtedness; our ability to integrate acquired businesses; our dependence on third-party lenders to provide the cash we need to fund our loans and our ability to affordably access third-party financing; actions of regulators and the negative impact of those actions on our business; our ability to protect our proprietary technology and analytics and keep up with that of our competitors; disruption of our information technology systems that adversely affect our business operations; ineffective pricing of the credit risk of our prospective or existing customers; inaccurate information supplied by customers or third parties could lead to errors in judging customers’ qualifications to receive loans; improper disclosure of customer personal data; failure of third parties who provide products, services or support to us; any failure of third-party lenders upon whom we rely to conduct business in certain states; disruption to our relationships with banks and other third-party electronic payment solutions providers; disruption caused by employee or third-party theft and errors in our stores as well as other factors discussed in our filings with the Securities and Exchange Commission. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual future results. We undertake no obligation to update, amend or clarify any forward-looking statement for any reason. Non-GAAP Financial Measures In addition to the financial information prepared in conformity with U.S. GAAP, we provide in this presentation certain “non-GAAP financial measures,” including: Adjusted Net Income (Net Income from continuing operations minus certain non-cash and other adjusting items); Adjusted Earnings Per Share (Adjusted net income divided by diluted weighted average shares outstanding); Adjusted EBITDA (EBITDA plus or minus certain non-cash and other adjusting items); Gross Combined Loans Receivable (includes loans originated by third-party lenders through CSO programs which are not included in our consolidated financial statements); and Adjusted Return on Average Assets. Such measures are intended as a supplemental measure of the Company’s performance that are not required by, or presented in accordance with, GAAP. The Company presents Adjusted Net Income, Adjusted Earnings Per Share, Adjusted EBITDA, Gross Combined Loans Receivable and Adjusted Return on Average Assets because it believes that, when viewed with the Company’s GAAP results and the accompanying reconciliation, such measures provide useful information for comparing the Company’s performance over various reporting periods as they remove from the Company’s operating results the impact of items that the Company believes do not reflect its core operating performance. Adjusted Net Income, Adjusted Earnings Per Share, Adjusted EBITDA, Gross Combined Loans Receivable and Adjusted Return on Average Assets are not substitutes for net earnings, cash flows provided by operating activities or any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted Net Income, Adjusted Earnings Per Share, Adjusted EBITDA, Gross Combined Loans Receivable and Adjusted Return on Average Assets. Although the Company believes that Adjusted Net Income, Adjusted Earnings Per Share, Adjusted EBITDA, Gross Combined Loans Receivable and Adjusted Return on Average Assets can make an evaluation of its operating performance more consistent because they remove items that do not reflect its core operations, other companies in the Company’s industry may define Adjusted Net Income, Adjusted Earnings Per Share, Adjusted EBITDA, Gross Combined Loans Receivable and Adjusted Return on Average Assets differently than the Company does. As a result, it may be difficult to use Adjusted Net Income, Adjusted Earnings Per Share, Adjusted EBITDA, Gross Combined Loans Receivable and Adjusted Return on Average Assets to compare the performance of those companies to the Company’s performance. Adjusted Net Income, Adjusted Earnings Per Share, Adjusted EBITDA, Gross Combined Loans Receivable and Adjusted Return on Average Assets should not be considered as measures of the income generated by the Company’s business or discretionary cash available to it to invest in the growth of its business. The Company’s management compensates for these limitations by reference to its GAAP results and using Adjusted Net Income, Adjusted Earnings Per Share, Adjusted EBITDA, Gross Combined Loans Receivable and Adjusted Return on Average Assets as supplemental measures. Reconciliation of non-GAAP metrics to the closest comparable GAAP metrics included within Exhibit 99.1 on Form 8-K filed on August 3, 2020, slide 13 and within the Supplemental Tables to the CURO Q2 2020 Conference Call at https://ir.curo.com/events-and-presentations. The presentation is confidential and may not be reproduced, redistributed, published or passed on to any other person, directly or indirectly, in whole or in part, for any purpose. This document may not be removed from the premises, and by accepting this document and attending the presentation, you agree to be bound by the foregoing limitations. If this document has been received in error it must be returned immediately to us. 2
Second Quarter 2020 Highlights 3 Customer trends 2020 Weekly Application Volume Loan Balances (1) Balance sheet and credit Financial performance (1) Includes Company-Owned Loans and Loans Guaranteed by the Company under CSO programs. (2) Reconciliation of non-GAAP metrics to the closest comparable GAAP metrics included within pages 11 and 12 of Exhibit 99.1 to Form 8-K filed on August 3, 2020, slide 13 of this presentation and within the Supplemental Tables to the CURO Q2 2020 Conference Call at https://ir.curo.com/events-and-presentations. ($ in millions) 2020 Transaction Mix (week ended) Payment Assistance Provided (loan count) Cash Balances Early-stage delinquencies Revenue Adjusted EBITDA (2) Adjusted EPS (2) $615 $677 $731 $743 $620 $491 $0 $150 $300 $450 $600 $750 $900 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 $83 $92 $62 $75 $139 $269 $0 $50 $100 $150 $200 $250 $300 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 ($ in millions) $0 $100 $200 $300 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Revenue Net revenue ($ in millions) $0.80 $0.52 $0.71 $0.80 $0.77 $0.53 $0.00 $0.20 $0.40 $0.60 $0.80 $1.00 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 ($ in millions) $73 $54 $67 $68 $66 $51 10% 15% 20% 25% 30% $0 $20 $40 $60 $80 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Adjusted EBITDA Adjusted EBITDA (%) -40% -30% -20% -10% 0% 10% 20% 0% 2% 4% 6% 8% 10% Dec-18Mar-19 Jun-19 Sep-19Dec-19Mar-20 Jun-20 Early Stage Delinquencies YoY Change in Early Stage Delinquencies YoY Change - 2,000 4,000 6,000 8,000 10,000 3/15 4/12 5/10 6/7 7/5 8/2 U.S. Canada 30% 40% 50% 60% 70% 1/ 4 1/ 25 2/ 15 3/ 7 3/ 28 4/ 18 5/ 9 5/ 30 6/ 20 7/ 11 8/ 1 Internet Store 20% 40% 60% 80% 100% 120%
Customers are Managing their Finances Prudently 2020 Weekly Loan Application Volumes (indexed to week of 3/7) 2020 Weekly Loan Approval Rates (indexed to week of 3/7) 4 Pre-COVID financial health, lockdowns, pandemic-induced uncertainty and stimulus = low demand 2020 Loan Originations (indexed to week of 3/7) 0% 50% 100% 150% 200% 2019 2020 0% 20% 40% 60% 80% 100 2019 2020 0% 50% 100% 150% 200% 2019 2020
2020 weekly delinquent loans as percentage of total (excluding Single Pay loans) 5 Customers are Managing their Finances Prudently (cont’d) YoY Change in Past Due AR Past Due AR % -35% -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% 0% 5% 10% 15% 20% 1-30 DPD 31-60 DPD 61+ DPD YOY Change in Past Due %
YOY sequential change in loan balances affects provision comps 6 Allowance coverage reflects continued uncertainty levels ($ in millions) Allowance for loan losses as a percentage of loans by product (1) Provision for loan losses by product 0% 5% 10% 15% 20% 25% 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Unsecured Installment Unsecured Installment - CSO Secured Installment Open-End Single-Pay (1) Includes the Allowance for Loan Losses for Company Owned Loans and Liability for Loans Guaranteed by the Company under CSO programs 1 $61 $62 $69 $68 $53 $24 $7 $8 $9 $11 $10 $7 $25 $29 $31 $38 $41 $21 $8 $12 $15 $12 $10 -$3 -$20 $0 $20 $40 $60 $80 $100 $120 $140 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 Unsecured Installment Secured Installment Open-End Single-Pay
Core Operating Expense Trends (1) 7 Continuing to Manage Expenses Carefully • Lowered operating expenses across several major categories in mid-March • Reduced advertising and variable compensation costs, froze hiring, suspended merit increases and drove savings from work-from-home initiatives • Realized targeted $11 million to $13 million in cost savings vs. operating plan in Q2 2020 • Expense control measures to remain in place until business volume normalizes ($ in millions) $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 YTD 2019 YTD 2020 Advertising Adjusted NACOPS Adjusted Corporate, district and other (1) Adjusted Non-Advertising Costs and Adjusted Corporate, district and other excludes Depreciation and Amortization and other expenses excluded in reconciliation Net Income to Adjusted Net Income. Reconciliation of non-GAAP metrics to the closest comparable GAAP metrics included on slide 13.
Katapult – The New Way to Pay, for Everyday People Leader in greenfield ecommerce non-prime space Strong revenue growth trends Weekly origination volume remains robust (1) Ecommerce wins enhance growth opportunities (year-over-year growth rate) Triple digit weekly volume (by $) increases during the pandemic (1) Origination volumes indexed to the week ended March 7 Partnerships with Affirm and Wayfair started in 2019 0% 50% 100% 150% 200% 250% Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 8 YOY Growth Rate Growth Rate vs week of 3/7 0% 100% 200% 00% 400% 500% 600% 0% 50% 100% 150% 200% 250% 300% 2020 2019 YoY Increase
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Senior Notes 8.25% U.S. SPV (3) 1-Mo LIBOR + 6.25% (3) Canada SPV 3-Mo CDOR + 6.75% U.S. Revolver 1-Mo LIBOR + 5.00% Canada Revolver Canada Prime Rate +1.95% Interest Rate Counterparties Maturity Dates 2020 2021 2022 2023 2024 2025 Strong Debt Capitalization and Liquidity 9 Note: Debt balances are reflected net of deferred interest costs. Subtotals may not sum due to rounding. (1) Reconciliation of non-GAAP metrics to the closest comparable GAAP metrics included within pages 11 and 12 of Exhibit 99.1 to Form 8-K filed on August 3, 2020 and within the Supplemental Tables to the CURO Q2 2020 Conference Call at https://ir.curo.com/events-and- presentations. (2) Net Debt excludes U.S. and Canada SPV debt. (3) The Non-Recourse U.S. SPV Facility (“U.S. SPV”) was entered into on April 8, 2020. Concurrent with the closing, we drew $35.2 million on the facility. The Non-Recourse U.S. SPV Facility initially provided for $100.0 million of borrowing capacity and, on July 31, 2020, additional commitments were obtained increasing capacity to $200.0 million. As a result of the increase in commitments, interest now accrues at an annual rate of one-month LIBOR (with a floor of 1.65%) plus 6.25% on balances up to $145.5 million. Balances over that amount accrue interest at an annual rate of one-month LIBOR (with a floor of 1.65%) plus 9.75%. Proven Access to Diverse Funding Sources Well-positioned Funding for Growth Supported by High-Quality Partners Strong Liquidity with Stable Leverage ($ in millions) $695 $765 $877 $877 $977 $- $200 $400 $600 $800 $1,000 $1,200 12/31/2016 12/31/2017 12/31/2018 12/31/2019 6/30/2020 Senior Notes U.S. SPV Commitment (3) Can da SPV Commitment U.S. Revolver Capacity Ca ada Revolver Capacity ($ in millions) 2016 2017 2018 2019 Unrestricted cash 182.9$ 153.5$ 61.2$ 75.2$ 138.7$ 269.3$ Total Liquidity 205.6$ 363.4$ Debt / LTM adjusted EBITDA (1) 3.2x 3.0x 3.7x 3.0x 3.1x 3.2x Net Debt / LTM adjusted EBITDA (1, 2) 2.7x 2.5x 3.2x 2.6x 2.8x 2.7x December 31, March, 31 2020 June 30, 2020
COVID-19 Customer Care Plan Reinforces our Commitment to Service and Responsible Lending Waived 150k Returned Item fees saving customers over $3 million Cashed stimulus checks worth nearly $50 million free of charge saving customers $1 million 25k Due Date Changes, and 10k Payment Plans Over $4 million of Payments Waived on 25k accounts Through July 2020, we have provided substantial financial support to our customers in the form of Payment Waivers, Due Date Changes and Payment Plans on almost 60,000 loans or 12% of our active loans Committed $500,000 to Frontline Foods to help feed healthcare workers 10
Trends to Watch in 2H20 11 • Customer demand increasing as the reopening process gains momentum • Potential additional stimulus measures impacting demand and credit trends • Seasonal demand lift from back-to-school shopping activity • Competitive landscape changes creating growth opportunities • Smaller, branch-only competitors are under considerable stress • Prime and near-prime lenders have tightened their credit boxes • Canadian open-end loan product resuming its upward trajectory • Customer assistance requests remaining low and stable with recent levels • Continued transaction mix shift toward online in U.S. and Canada • Ongoing expansion of Verge Credit product • Now offered in 10 U.S. states, up from 4 in 1Q20 • Growing contributions from ancillary card products and Katapult • Marketing and discretionary expenses remaining low until customer demand improves
12 Appendix
Core Operating Expense Reconciliation 13 ($Millions) (1) Reconciliation of non-GAAP metrics to the closest comparable GAAP metrics included within pages 11 and 12 of Exhibit 99.1 to Form 8-K filed on August 3, 2020 and within the Supplemental Tables to the CURO Q2 2020 Conference Call at https://ir.curo.com/events-and-presentations. (2) Prior to our acquisition of Ad Astra in January 2020, costs associated with this third party collection entity were classified within Non-advertising costs of providing services. Subsequent to acquisition, direct costs related to Ad Astra and are classified within Corporate, district and other, consistent with our internal collection costs. Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 1H 2019 1H 2020 Corporate, district and other 49.1$ 35.3$ 38.7$ 37.1$ 42.8$ 36.8$ 84.4$ 79.6$ Less: Depreciation and Amortization 2.1 1.8 1.8 1.8 1.9 1.9 4.0 3.8 Share-based compensation (1) 2.2 2.6 2.8 2.7 3.2 3.3 4.8 6.5 Legal and other (1) 1.8 - 0.9 2.2 1.1 0.9 1.8 2.1 U.K. related costs (1) 7.8 0.7 0.3 - - - 8.5 - Canada GST Adjustment (1) - - - - - 2.2 - 2.2 Add: Reclass Ad Astra pre-acquisition (2) 4.7 3.7 3.6 3.6 - - 8.4 - Adjusted Corporate, district and other 62.3$ 58.3$ 60.3$ 60.3$ 55.4$ 49.6$ 120.6$ 104.9$ Non-advertising costs of providing services 62.3$ 58.3$ 60.3$ 60.3$ 55.4$ 49.6$ 120.6$ 104.9$ Less: Depreciation 2.8 2.8 2.8 2.7 2.6 2.6 5.6 5.2 Reclass Ad Astra pre-acquisition (2) 4.7 3.7 3.6 3.6 - - 8.4 - Adjusted Non-advertising costs of providing services 54.8$ 51.8$ 54.0$ 54.0$ 52.7$ 47.0$ 106.6$ 99.7$ Advertising 7.8$ 12.8$ 16.4$ 16.4$ 12.2$ 5.8$ 20.6$ 18.0$ Adjusted Non-advertising costs of providing services 54.8 51.8 54.0 54.0 52.7 47.0 106.6 99.7 Adjusted Corporate, district and other 62.3 58.3 60.3 60.3 55.4 49.6 120.6 104.9 Total Core Costs 124.9$ 122.9$ 130.8$ 130.7$ 120.3$ 102.3$ 247.8$ 222.6$
