International Personal Finance plc

Welcome everyone to our full year results presentation for 2024. Now if you've had a chance this morning to look at the RNS that we put out you'll already be aware that 2024 was a really excellent year for our group and so today Gary our CFO and I will be really happy to talk you through these very successful results and the key drivers for those results. Now as usual I'm going to start and I'm going to talk about the business at a very high level and I'll also talk about the key drivers but Gary's going to get into that in more detail. I'll then go on and cover our strategy, so that's our next-gen strategy that you've heard about before, the three pillars of it and why executing against that strategy delivered the results that you see today. Then Gary's going to pick up and he's going to talk about divisional performance, so P&L performance at a very detailed level and all of the key drivers there as well. He'll then go on to cover the balance sheet, talking about the asset quality and how that's improved over time, about the liability side of the balance sheet and how we've completely refinanced the business in 2024. And then finally, he's going to cover off the equity side with some good news for shareholders there also. I'm going to pick up after that and I'm going to talk about how we see the business going forward in 2025 and beyond. And then we'll have a very brief recap before going to Q&A. Now, as always, there will be plenty of time for Q&A at the end, but hopefully at the bottom of your screens, you should be able to see a dialogue box. And as we go through this presentation today, if you have any questions, just type them in there. And at the end, Rach is going to put those questions to us and hopefully we'll answer all of those for you. In total, I think it should take about 35 to 40 minutes to get through all of this together. Okay, so with that, let's get started. Now, as I said, if you've seen the RNS, you know it's been a really good year. And all of it's based on the performance of our strategy. But all of that is down to flawless execution by our colleagues across the business. And whereas I usually give a shout out to our colleagues at the end of the presentation, I want to do it up front because what you see on the page today is down to their hard work and excellent execution. And what that really means is that we've delivered £85.2 million of profit before exceptional items. So that's up 1.5% year on year. Now that puts us in the 15 to 20 bracket in terms of our ORO RE, which is our target range that Gary will talk to us about later. Now the balance sheet side of that is very strong. As you know, we have a publicly stated target of 40% equity to receivables. But as you can see on the page, we're standing at 54%. And that's despite the fact that we executed a very successful £15 million share buyback in 2024. And we took some hits based on weaker currencies during the year. So as a result of that very strong balance sheet and really good results and a good momentum going into 2025 the board have confirmed that we will do another share buyback this year. So up to 15 million pounds and we look at that as being completed we believe by the end of Q3. And in further good news for shareholders, in terms of the dividend, the dividend for the year as a whole is going to be up approximately 11% and the final dividend is going to be 8 pence per share. So really a very good set of results from the group altogether. Now, all of these results are driven by the fact that we are fulfilling a purpose in this organization, and that is to build financial inclusion. And I have to say for me, one of the proudest moments for me during 2024 was this particular milestone. And that is when we delivered our loan to our 15 millionth customer. So that is 15 million individuals whose lives were improved by having finance presented to them that was both fair and transparent, where otherwise that might not have been the case. So really a huge accolade for the organisation and everybody who works in it. The way we deliver those 15 million loans is based off our next-gen strategy. And just as a brief reminder here, we do have these three pillars. So we have next-gen financial inclusion, which is all about delivering the products and channels to the customers in the markets in which we operate. We have next-gen organisation and really that's about being a smarter and more efficient organisation and having a positive impact in society. And finally we have next-gen tech and data and that's about using the huge mass of data that we've built up over all these years to be a smarter organisation and improve our offerings to our customers. So let me take you through each of these three pillars now, and I'll give you some examples of the execution against these pillars during 2024 that delivered the results we're talking about today. Firstly, next-gen financial inclusion. Now, as you know, one of the biggest challenges that we've had in many, many years is changing regulation, and particularly, I would say, in Poland. Now, as part of our adaption to that regulation in Poland, we delivered a credit card, a completely new credit card, new to us, but not only new to us, new to our customers, and opened up a new credit card segment in its entirety in Poland. Well, I'm delighted to say that following on from the news that we gave you at the half year talking about how successful it was, that success has continued. And today we have delivered over 200,000 credit cards and we have 150,000 active users of those cards in Poland. And they really like the card. Our view is that that's a proven product now that we will be able to use in other countries. And we'll talk more about that shortly. In Mexico, we continue to expand our branch footprint there, bringing in more regions. And Gary's going to talk later about how we're improving the performance of Mexico as a whole as well. Now you'll have heard us talk probably over the past year about our partnerships model and that is where we work with retailers to provide finance for our type of customers in their stores. Well I'm delighted to say that we really have accelerated down this path in 2024 and in Romania we now have 700 retail stores working with us and in Mexico we've opened up with 50 online retailers there. And believe me, this really is the start of that journey. I think this could be the game changer for us in terms of acquiring new customers in the years ahead. Now, also in Romania, we have a digital business which is new and forming. And you'll have heard us say that we believe that wherever we have a home credit business in a country, we should also be offering digital options. We now have that in Mexico, we have it in Poland and we have it in the Czech Republic. And I'm happy to say that now it's also launched in Romania. And then finally, in our digital business, IPFD. I have to say congratulations to our team there because they've smashed through the 100,000 barrier in terms of mobile wallet. And we now have 115,000 customers actively using the wallet. And what we know from experience is that if a customer uses our mobile wallet, they're a happier customer and they use our facilities more. So a win-win really. So lots of really good news on the financial inclusion pillar. If we move on now to next-gen organization, we are going to touch shortly on one of the exceptional items, and it's related to point number one here, which is the field reorganization that we did in Poland following the change in regulation. And we took out 250 roles there. I'm happy to say that that is now fully bedded down and operating very effectively. In addition, European Home Credit which is Poland, Hungary, Czech and Romania, we now have an overarching single leadership there and it's working very effectively and the sole purpose there, the real purpose is to drive commonality of processes which will allow us to have common systems and believe me that if we get to have common processes and common systems it will save us an absolute fortune. This is a really big deal for us and one we're intent on executing I would say over the next 18 to 24 months. The credit cards, just to go back to that. One of the things about NextGen.org in terms of being a smarter organisation is that we shouldn't have to recreate everything when we go to a new market. So the best example that you're going to see of that is hopefully before the end of this year we will be talking to you about picking that credit card product that we have, lifting it and shifting it to another market in Europe. But the real, I suppose the trick here is not to rebuild things. So we will be leveraging the infrastructure, so the technology, but also the leadership team and skills that we've built in Poland to do that. So you'll hear more about that later in the year. And then the second part of this pillar is about being a good corporate citizen. So in 2024, we invested just under a million pounds in our community activities, the most important of which is invisibles. But in addition, our colleagues also spend time and effort entering into lots of competitions Because it's really important to us that not only do we do the right thing, but that we're seen to do the right thing. So if you ever get five minutes, five minutes during a lunch break, sign on to our website and you will see the number of awards that we've won for being transparent and fair to customers. It is really fantastic. And also being a great place to work. And then finally, the third pillar, which is next gen tech and data. Now, here what we're trying to do is make ourselves more efficient, but also improve the life of a customer with our organization. And one of the things that we've learned from customers is they do want to have more access to their accounts through their facilities. And we're doing that by providing apps. So if I just mention the Mexico customer app here, that's been downloaded more than 360 times and is being actively used by all of our customers there. We have a similar app in Poland. It's called Prawi Go. And that in Poland now has a penetration rate of 55%. But believe it or not, we get 1.3 million active sign-ons from customers every month using that app. And before the end of 25, maybe by January 26, we will have rolled out that app to all the other home credit markets in Europe. So really fantastic for the customer, but also great for our business as well. Now another one in terms of using tech and data is transforming the overarching customer experience and here in our language talk about Project Xenia and that is really to create an omnichannel experience for our customers in European home credit. So what does that mean? Well it means if a customer comes in and contacts us they can do it by telephone, They can go online into our call center. They could do it via an app, or they could just speak to an agent. Our view now is a customer should be able to jump seamlessly from one channel to another. So the omni-channel experience. And our project Xenia, this overarching software, is delivering that. It's now in three of our four countries in European Home Credit, and we're turning on more modules each month as we go forward. So really a great experience for the customer, but actually in the long run will save us a lot of time and effort. And then finally, just to touch on AI and how we see that impacting the business. Now, I don't think I'm going to be standing up here anytime soon and saying, you know, Eureka, revolution with AI. But I do believe every six months we'll stand up here and we will talk about the incremental benefits of using AI in our organization. And just to give you two examples here. So in our call center in Mexico, our team now have found a way of using AI and WhatsApp together, because WhatsApp in Mexico is hugely popular. And so by integrating AI and WhatsApp conversations with customers, they're able to divert calls out of the call center But without the customer knowing, the customer feels they're having this engaging conversation. It's more than a chatbot because it's smarter than that. And we estimate that just from the first iteration that we have there, we will probably be saving ourselves 20 to 30 roles in that call center. Just a second brief example, and again, it's to do with a call center, but this time in Hungary, where our colleagues there are using AI to interpret Hungarian conversations between customers and our representatives in the call center. And by interpreting those conversations, the AI module is able to suggest the next best answers for our representatives there. And pretty soon we believe that by using AI to understand more and more of these conversations, then we'll be able to use chatbots more effectively as well. A better experience for the customer, so calls will be answered almost instantaneously, but also great savings for us. So just two examples there of how AI, I think, can have a meaningful impact in the business going forward. So that's our next-gen strategy. I've just mentioned at a very high level how well the business did in 2024. So to take us through that in a lot more detail now, let me hand you over to Gary, who's going to walk us through all of that. Gary.

Thank you Gerard and hello everybody. As Gerard discussed earlier, we have delivered a strong set of results in 2024 with reported pre-exceptional profit before tax increasing by 1.5% to £85.2 million. Now this result is ahead of the guidance we provided at the interim results of a full year PBT of between 78 million and 82 million and was delivered despite a 5 million year-on-year adverse impact from weaker exchange rates. Our continued financial progress in 2024 was underpinned by outstanding customer repayment behaviour, strong operational execution against our next-gen strategy and the ongoing rigorous application of our financial model. Now all three divisions delivered profits ahead of our plans in 2024. And it is worth adding that over the last two years, we have cumulatively increased group profits by 5% per annum, whilst at the same time adapting our Polish business to stricter rate caps and enhanced affordability regulation, which have impacted our profits by over 20 million per annum. Before moving on to detailed divisional results, it is worth highlighting the phasing of reported profits by half, which should help you when considering forecasting 2025. You can see in the table on the bottom left, first half profits of 47.3 million were up 25.1% year on year, and on a constant exchange rate basis, that was broadly the same at 26.1%. At the interim results, we indicated that we expected second half profits to be lower due to the combined impact of the repricing of credit cards in Poland taking full effect, as well as stronger lending growth. Reported second half profits of 37.9 million were therefore down by 17.8% compared with 2023. However, this result was also significantly impacted by the weakness in the Mexican peso and Hungarian forint. And if we look at the results on a constant exchange rate basis, second half profits were actually down by a much lesser extent of 8.7%. Full-year profits grew by 7.8% when viewed on a constant exchange rate basis, compared with the 1.5% reported, which again reinforces the very robust financial performance in 2024. And finally, PBT in 2024 is stated before two exceptional costs totaling £11.9 million. Firstly, and as Gerard mentioned, we incurred 6.1 million of field and head office restructuring costs in Poland, as we removed 250 roles in order to right-size the business. And secondly, we incurred 5.8 million of costs in respect of the successful Eurobond refinancing, comprising tender costs and the write-off of un-amortized fees, both in respect to the old bond. And that number is the same as the first half. Now moving on to lending growth. We delivered good group lending growth of 9% at constant exchange rates in 2024 as demand in all of our markets remains healthy. In European Home Credit, Romania, Hungary and the Czech Republic delivered combined lending growth of 12%. Hungary delivered record lending volumes for the second year running and continues to be one of the group's best performing markets. Romania continues to be one of our most innovative European markets and we saw good growth in both retail partnerships and hybrid volume. And it is very pleasing to see that the Czech market is back in growth mode and returned to profitability following a loss last year. So really great signs from all these three markets, which is reinforced by the strong momentum we are seeing with second half growth in lending of 17%, up from 8% in the first half. Similarly, in Poland, lending trends improved significantly as the year progressed. And we saw the business recover from a year-on-year contraction of 5% in the first half of the year to 36% growth in the second half. The business remains profitable, has now fully adapted to the impact of lower rate caps and enhanced affordability assessments and the granting of the full payment institution licence in November will allow us to increase credit card lending volumes going forward and improve returns. Demand in Mexico remains robust, but lending in 2024 showed only a modest growth of 1% as the business experienced disruption from an IT upgrade in the fourth quarter of the year. Due to ongoing instability in our Provi Digital front end, the lending technology used by our customer representatives, as well as also in the customer app, we took the decision to upgrade to a more modern and resilient infrastructure to provide a more stable and secure base to accelerate growth in the future. This change disrupted our field activities in the fourth quarter, leading to an 8% year-on-year contraction in lending during that period, having previously been at about 4% year-on-year growth in the first three quarters of the year. Now I'm pleased to report that the upgraded technology has now been deployed and the business has been delivering weekly year-on-year sales growth in 2025. With the added traction from the management actions implemented in the previously underperforming regions of Mexico City and Sereste, the opening of two new branches in 2025 and the weak fourth quarter comparative, we expect to deliver strong lending growth above 10% in 2025. And before I move on, it is worth saying that despite the IT disruption in the fourth quarter and the weak Mexican peso I mentioned earlier, Mexico Home Credit delivered record profits of 26 million pounds in the year, which really demonstrates how resilient the business now is. In IPF Digital, customer lending showed really good growth of 10%. Mexico and Australia, which represent very attractive growth markets, delivered stellar results with lending growth of 22% and 21% respectively. We are really excited about the future of these two businesses and we intend to continue investing in their strong growth through brand investment and enhancing our product offering. The Czech Republic delivered 15% growth under the leadership of the IPF digital management team for the first time, whilst the more mature Baltic markets delivered 3% growth. In Poland, whilst full-year lending reduced by 2% year-on-year, this was definitely a tale of two halves. In the first half, we saw an 18% contraction in lending, but in the second half, we delivered strong growth of 20% as the customer base and receivables book have now fully stabilized following the changes in regulation over the last two years. And similar to our home credit business, we see really good growth prospects with our digital business in Poland as we continue to enhance our product offering and our distribution channels. And now on to receivables. The strong momentum in lending growth I have just explained is now firmly flowing through to receivables growth. And after reporting flat receivables growth in the first half of the year, due to the transition in Poland, we delivered 7% year-on-year growth by the end of 2024. And for me, this marks a new chapter in the recent evolution of the group, as we are now pivoting towards an acceleration in receivables growth to capture the significant opportunities that lie ahead of us. In European Home Credit, we delivered receivables growth of 3% to £460 million. Hungary, Romania and the Czech Republic combined delivered an impressive 13% growth. As expected, we saw a 13% year-on-year reduction in Poland for the year as a whole. However, after stabilising the receivables book in the third quarter, the growth in lending volumes in Poland led to a 6% increase in receivables in the fourth quarter to just over £150 million. Overall, with a strong momentum we are seeing in lending volumes, we anticipate European Home Credit receivables growth in excess of 15% in 2025. In Mexico Home Credit, we delivered relatively modest receivables growth of 3%, and that wholly reflects the impact from the IT disruption we experienced in the fourth quarter, as I explained on the previous slide. However, with lending growth now back on a positive trajectory, we expect receivables growth of around 15%, similar to European Home Credit in 2025. In IPF Digital, we continue to execute our growth strategy to rebuild receivables to gain scale and deliver our target return. And this led to strong receivables growth of 18% to 251 million. Mexico, Australia, and our emerging Czech businesses were the standout performers, each delivering receivables growth above 26%, while our more mature Baltic markets also delivered good growth of 13%. Now in Poland, I'm really pleased to report that we delivered 3% receivables growth in the year, with growth of 6% to 38 million being delivered in the last quarter alone. And overall, in 2025, we expect IPF Digital to deliver a similar level of receivables growth to that achieved in 2024. So looking at the expected growth rates by division that I've just discussed and doing the sums, you will see that we're expecting receivables growth of in excess of 150 million in 2025. And that's why we talk about 2025 being a year of accelerating growth. I'd now like to turn to the progress we are making against the core KPIs supporting our financial model. The group's revenue yield showed a modest reduction from 55.3% to 54.7% in 2024, mainly due to the impact from the introduction of the rate cap on credit cards in Poland in the first quarter. Now, if we exclude Poland, the revenue yield remains stable at 57.3%, in line with the group's target range of 56% to 58%. Now dealing with the individual divisions, the annualised yield in European Home Credit of 46.5% showed a one percentage point reduction due to the impact of Poland, which I just referred to. We expect the yield to remain pretty stable in the year ahead. The revenue yield in Mexico Home Credit has reduced to 85.9% as there has been a modest shift in the mix of lending to slightly longer, lower yielding products served to existing customers. And IPF Digital's yield saw a reduction of one percentage point to 42.7%. And this reflects the impact of the flow through of reduced rate caps in Latvia and Poland, both of which were lowered at the end of 2022, as well as in Estonia, which is recalculated biannually. These adverse variances have been partly offset by the growth in Mexico, which has a higher revenue yield. And we'd expect IPF digital yield to rise in 2025 as Mexico becomes a larger proportion of the business. Despite some volatility in macroeconomic markets, customer repayment behavior has remained very strong. And together with tight credit standards, the quality of our loan portfolio continues to be excellent. all three divisions delivered an improvement in their impairment rate in 2024, which together with a £6 million reduction in the cost of living provision led to the group's impairment rate reducing from 12.2% to 9.6%. Now this performance was better than our internal plans and is much better than our medium term target range of 14% to 16%. We expect the impairment rate to progressively grow back towards our target range as we accelerate growth through 2025 and 2026. And the improved credit quality led to a reduction in the group's impairment coverage ratio from 36.3% to 32.9% during the year. And with excellent credit quality across all our divisions, we are very well positioned to accelerate growth in 2025. We continue to maintain a strict focus on efficiency and cost control. The group's cost-income ratio at 61% is four percentage points higher than last year, wholly due to the reduction in revenue in Poland. This is demonstrated by the fact that if we exclude the Polish home credit business, the group's cost-income ratios remained stable at 55.4% as we invested in growth in the second half of the year, as well as the resources to accelerate the pace of change across the group. As you know, a key focus of our next-gen strategy is to become a smarter and more efficient organization through process improvements and the deployment of technology. We expect the groups ratio to improve as we deliver increased growth, build scale and continue to execute on our cost efficiency programme. And we remain committed to our target range of 49% to 51% in the medium term. And we estimate that we'll hit that target cost income ratio in around 2027. So to summarise on this slide, you can see that despite the impact of the recent changes to credit card pricing, we continue to make progress against each of our KPIs as we improve shareholder returns. Now moving on to returns. Our pre-exception RORE improved to 15.7% in the year, up from 14.8% last year. This reflects the delivery of target returns of 20% in both European Home Credit and Mexico Home Credit, as well as improving returns in IPF Digital as we build scale. Now, we expect returns to moderate a touch in 2025 due to the acceleration in receivables growth, which brings with it increased upfront impairment charges under IFRS 9. The group's pre-exception ROE based on actual equity was 11.5% in 2024, up from 11.1% last year. Our pre-exceptional EPS increased by 7.3% to 24.9 pence, which is a higher rate of growth than the 1.5% growth in pre-exceptional PBT due to a lower tax rate and a lower number of shares in issue following the successful completion of the share buyback in the second half of the year. The effective tax rate has reduced from 38% last year to 35% in 2024 due to a reduction in disallowable bad debt in Poland and the use of some tax losses in Mexico. And the lower tax rate was despite the extra profit special tax in Hungary of approximately 2 million, which we now put as part of our normal tax charge rather than being treated as exceptional, which I explained at the interim result. We expect our go forward effective tax rate to be around 38%, which is lower than our previous estimates of 40%. Our reported EPS grew by 27% to 27.3 pence in 2024, a much higher rate than the 7.3% growth in pre-exception EPS. Now this is due to the impact of pre-tax exceptional charges of 11.9 million, I explained earlier, being more than offset by exceptional tax credits of 17.4 million. The exceptional tax credits comprise two items. Firstly, and the most straightforward, we have recognised the £2.2 million exceptional tax credit in respect to the tax deduction on the exceptional costs of £11.9 million, which I talked about earlier. And secondly, and by far the biggest element, is the recognition of a 15.2 million exceptional tax credit following a favourable judgment from the European Court of Justice in favour of the UK state aid case in September. You may remember that we had previously written off this amount back in 2022, but we have now reinstated the asset and expect to receive a payment from HMRC in the second quarter. And finally, I'll mention here with the recognition of this credit, we have also included a contingent liability disclosure in respect of the group's associated financing company arrangements linked to the state aid case. And full details are set out in the year end statement. The board has proposed a final dividend of eight pence per share, which represents 11.1% growth on last year. Together with the interim dividend of 3.4 pence per share, this brings the full year dividend to 11.4 pence per share, an increase of 10.7% compared with 2023. The growth in the dividend is fully supported by our excellent performance in 2024, a strong balance sheet and the board's confidence on the group's future prospects. The dividend payout ratio of 46% is above our target of a minimum 40%, which is consistent with our stated desire to maintain a progressive dividend policy as we rebuild the business and reach our target financial model. So now on to funding and the excellent progress we made in 2024. As I mentioned at the interim results, we were delighted with a successful refinancing of the Group's €341 million bond in June, well ahead of its maturity in November 2025. The refinancing was accompanied by a ratings upgrade from BB- to BB from fixed ratings, and it is very pleasing that the bonds are trading well on the secondary market, currently yielding around 8.5%. This ensures that the group is in excellent shape for any future new bond issuances. In addition to the Eurobond refinancing, we also secured 103 million of bank facilities during the year, of which 37 million was new or increased facilities. We continue to have very strong and supportive relationships with 18 lending banks across our businesses and this has been further demonstrated by 20 million of facilities already refinanced in early 2025. At the end of December, we had total debt facilities of 657 million, comprising 441 million of bonds and 216 million of bank facilities, as you can see on the slide. This provides us with funding headroom of 138 million, which supports our growth plans right through to the end of 2025. And the average maturity profile of our debt facilities now stands at three years, up from two years at the end of last year. And approximately 490 million of our debt funding now matures beyond 2025. And finally on funding, our funding rate in 2024 was 13.3%, lower than 14% last year. And this was due to a reduction in interest rates across our markets, as well as a lower cost of hedging as interest differentials narrowed. We'd expect this rate to be broadly stable in 2025, with lower interest rates across our markets being offset by the 100 basis points increase in the headline rate of the Eurobond. And now on to capital. I won't dwell on our financial model as I'm sure you are all now very familiar on how it works and how it sets out the target returns we need to support our dividend policy, fund our growth and ensure the balance sheet remains secure at all times. An important aspect of our financial model is that capital is only allocated where it can deliver appropriate returns to shareholders, whilst also balancing the needs of all our stakeholders. At the end of 2024, our equity to receivables ratio stood at 54%, down only 2% from 56% at the end of last year. But this is much higher than our target of 40%, as you'll see in the financial model. The reduction in the year reflects two factors. Firstly, a 57 million foreign exchange translation loss taken to reserves, primarily due to the 20% depreciation in the Mexican peso versus sterling, and also the 10% depreciation in the Hungarian forint. And secondly, as we outlined with interim results and as Gerard mentioned, we undertook a 15 million share buyback in the second half of the year, utilising surplus capital over and above that necessary to fund growth and our progressive dividend policy. After assessing the Group's current trading performance, cash generation and future growth plans, we are announcing today our intention to undertake a further share buyback programme of up to £15 million and complete this during the third quarter of the year. We believe that this would deliver a positive return and increase capital efficiency whilst ensuring that the balance sheet remains very strong. The remaining capital will enable us to pursue our ambitious growth strategy. And we talked about 150 million receivables growth this year and our progressive dividend policy through to the point at which we are delivering our target returns and operating in line with our financial model. And we now expect this to be broadly in 2027. So to sum up. We've delivered a great set of results in 2024. Credit quality remains excellent. We continue to see improved momentum on lending growth, and we have a very robust funding and capital position to support our plans. And on that note, I will now hand back to Gerard to take you through the outlook.

Thank you, Gary. Thank you. Well, in truth, it is an excellent story. And there are so many things that you could pick out of what Gary's taken us through over the last 20 minutes. But for me, just a couple of things. The fact that in Poland, we've absorbed the change in Poland, which, as Gary mentioned, could be up to 20 million pounds per annum. And still the business moves forward because all of the other businesses and divisions are doing so well. And the second thing I would pick out would just be the sheer quality of the balance sheet. And if you were to take the time to look back over our business results over the last several years, the one thing you will see is that consistently year on year now, our balance sheet quality is improving every year. So great stuff there altogether. So with that, I thought I'd move on now to some comments on the outlook. So where are we going to take the business in 2025 and beyond? As Gary's mentioned, we're talking internally about this being the year of acceleration. So it's in two parts, accelerating the pace of growth and accelerating the pace of change in the business to deliver that growth. So I just thought I'd give you some pointers here on the screen in terms of where that growth is going to come from, the focus areas that we're looking at for 2025. So first up is credit cards. As we've both mentioned, a really excellent result in credit cards in Poland. But our view is we can take that further, not alone in Poland with our new license, but also lift and shift that product into another market in Europe later this year or early next year. So we'll talk to you a bit about that later in the year. The second one is expanding the retail opportunities that we have. We really have accelerated enormously in Romania and now I'd like to do the same in Mexico, but the opportunity here is really enormous. It's about as many retailers as there are out there that we can sign up, but it's For us, we're trying to be focused and provide finance to retailers who deal with our type of customer. But the opportunity is very significant. I mentioned digital already. Wherever we have home credit, we have digital. And so we're expanding now into Romania and we will go on and do all of our country so that we have home credit. Wherever we have home credit, we do also have digital. The Poland recovery story, we shouldn't really underestimate how big a deal it was for the business, and I know it was a big overhang in terms of our stock for at least probably three years. I won't say it's behind us, but we've got through the new story, we've restructured the field, we've changed the product structure, and we've demonstrated very clearly with these results that the business is now back in growth mode and will continue to be a major performer in our group. Then Mexico, it's a continued expansion story in Mexico, but it's at a pace that we believe is appropriate for Mexico because the one thing I've always said about Mexico is you can lend lots of money in Mexico very easy. It's the getting it back is the trick. And so the pace of growth there is to ensure that the portfolio quality is what we need it to be. So the impairment rate around that 30% mark that we've now achieved. And finally in IPF Digital, just two markets to pick out of all of the markets in digital, Australia and Mexico. Now I and a few members of our exec team spent quite a bit of time in Mexico and Australia in 2024 exploring the opportunities there and I have to say that we came back from each of those visits hugely invigorated about how big we think those markets could be for us. So I think by the time we get to the half year we'll be talking to you more about our expansion plans in digital in both of those markets. So that really is where the growth is going to come from. There shouldn't be too many surprises there, but the truth is we are now accelerating through these. And in order to deliver this, you know, the accelerated growth, we need an accelerated pace of change internally. So what does that look like? Well, Xenia is the omnichannel technology that I've talked about that we're rolling out across Europe. We're making great strides there. It's really good for the customer, but also it will be really good for us. It will make us more efficient internally. customer apps absolutely essential the customers love it and now we love it too the Mexico one really popular but the one that's really blown me away is the the app in Poland where we have those 1.3 million sign-ons every month and it is absolutely our intention to use that same app in the other three home credit markets in Europe and to do that I would say within 12 months so by January of 2026 Now one thing I haven't mentioned is Transformation Office. You'll gather from the conversation that Gary and I have had with you today that we have a lot going on internally, whether it's new products, new distribution channels, new technology, the apps, everything. And we need to make sure that all of those things dovetail together. So optimizing the use of resource, but also landing things in a sequence that makes sense for us and for the business as a whole. And so we're setting up a transformation office internally. It's going to be staffed with people who are experts in this area. We're only just beginning to build it out. So I would say by the end of the year, we'll be talking to you about this in more detail, but it's all about making sure we land each of these strategic projects right on the money. Then the credit card platform is just going to be a really perfect example of picking up technology that we've built, finessing it a little bit more and then adapting for local regulation, but not anything else. So lift and shift into a new market. And finally, the AI and robotics that I talked about earlier, the examples I gave you there. So hopefully you can see from this menu, there is a lot going on, but it is all absolutely lined up with the three pillars of our strategy. then finally just to recap you know 2024 really has been an excellent year for our group it's down to a really good strategy which hopefully you're all familiar with now but also i would say almost faultless execution by our teams and again a huge shout out to them they work tremendously hard for our business and our customers we are very focused on delivering growth and also delivering returns for our shareholders and in terms of taking the business forward it is genuinely about accelerating both growth and the pace of change across the business. So with that, hopefully we got there in about 35 or 40 minutes. We're now going to go to questions. So I'll ask Gary and Rach to come up and join us and answer any questions that you might have had for us during the presentation. Okay, guys.

Okay, good morning everybody. First question I think for you Gerard. Are there any constraints to further rolling out the number of retail partners that you deal with?

No, in short there are no constraints. It's really a question of meeting the right partners, arranging what it is they're looking for and then developing the technology for them because every partner has a slight twist on their technology. We use the same core at our end. It's the front end twist that we need to do. But no limitations at all. So what you're seeing in Romania where we've gone to 700 retail outlets is what I would hope to be able to replicate in other markets as well.

Okay. And this one is on credit card. At what point will you start to launch the credit card product into new geographies?

Well, I sort of hinted at that, I think, during the presentation there. We don't want to put a firm date on it, but our view is that by this time next year, we should be looking at a second market, as in we should have the infrastructure in there and be ready to launch.

Probably one for you, Gary, here. What do you expect Mexico home credit yield to do this year in 2025?

Pretty stable. We're not expecting any significant change. So take what we delivered, which was around 86.9, 87 as being what we'd expect going forward.

Okay. How do you plan to increase the number of customers at IPF?

Yeah, I mean obviously what we've seen over the last two years is the transition in Poland and we've lost around 100,000 customers in Poland. Clearly what you've seen at the same time is the other businesses growing, Mexico, the rest of Europe, clearly in digital, Mexico, Australia, so plenty of growth options. Now that Poland's stabilized, we'd expect customer numbers now to be growing quite nicely going forward and that's really a continuation of Well, a lot of the white spaces that Gerard talked about, continuing to grow our core businesses, the great organic opportunity we've got, and also Poland, Poland regrowing and starting to put customers on. So we fully expect some nice growth. As a broad rule, when we grow receivables, if we grew receivables by about 10%, we'd expect customer growth of half that. That's a broad rule of thumb going forward.

Thank you. Back to credit cards actually. One of our investors has asked, is there any cap for credit cards?

So Poland specifically. We would have announced this back this time last year. We'd received a letter as had all market participants in Poland saying that the KNF, so our regulator there, viewed the cap that was applicable to loans as now being applicable to cards. And so we changed all of our pricing. We applied that to cards. So it's the very same cap for installment loans as it is for the credit cards.

On to funding, can you update on any plans for future diversification of funding including the potential to add a banking licence?

Obviously you saw that in 2024 we did really well refinancing the Eurobond firstly but for me the bank funding and actually sourcing more bank funding was a real great achievement in 2024 and so we'll continue that going forward and that started really well for us. Clearly we've got the option of going back to the Scandinavian market which with the Eurobond yielding as it is at the moment that looks another attractive opportunity. In terms of bank funding that We've talked previously that we would like a bank licence in the group to add another string to the funding sources. That's still very much part of our thinking. Nothing concrete at the moment though, but it's definitely still part of our thinking.

Okay, thank you. I think I've seen a couple of questions along the lines of the following. What is the key to allowing you to reduce the equity to receivables ratio down to your 40% target?

Sure. When we were looking at our capital plan, clearly we're looking at three things. Growth, well four things. Growth would be the first one and clearly we have got some really ambitious growth plans and I hope Everybody's seen what those are today. So that's number one priority. Clearly number two, we've always said progressive dividend policy and the board is very committed to continuing to do that. Thirdly, clearly returns, obviously an important part of the financial model. And then anything that we see as being potentially surplus to that will return to shareholders as part of the share buyback. So we did that in the half year clearly and we're setting out that stall again. But fundamentally we'd expect... the equity to receivables ratio to be in and around the 40% in 2027 if that's what people are looking for. That's what our plans say. Clearly that's supporting a lot of growth, progressive dividend policy and what you've seen today with the share buyback.

Okay, thank you. How are you thinking about the risk of potential tariffs on your prospects in Mexico specifically from America?

Well, look, we don't see any immediate impact or imminent impact. The truth is, I think Trump himself says he's a transactional man. I think if he gets something in return for what he's looking for, some of those tariff discussions might go away. And even if they come into play, the truth is our social demographic group is a long way down the value chain. And the incomes that they have, I would say, would probably be largely undisturbed by what Trump is talking about. So we're not viewing it as any kind of existential issue for our business.

OK, thank you. Back to retail partnerships. What additional investment is required to capture the opportunity? And how should we think about the profile of growth?

Yeah, I don't think there's any particular investment in their sort of partnerships over and above what's currently in our plans. So, you know, clearly in the early stages there's a J curve that you take. We're clearly absorbing that. And we'd expect probably another year of investment next year. But again, that's within what the market numbers say. And then from there on, we'd be expecting to see returns back from partnerships. So we do see it as a really important contributor to the group in terms of delivering us the receivables and customer growth that we've talked about. So in terms of the guidance that we've given within the statement, that all captures everything to do with retail partnerships and our plans going forward.

Okay, back to credit cards now again. Can you please talk about Poland and the credit card business? Following the granting of the new licence, have you changed your routes to client acquisition? Have the costs of client acquisition changed? What do you think the medium-term potential is in Poland alone? And have you seen any of our newer customers' behaviours different to the ones that we acquired early on?

It's a multifaceted question. Can I remember all those? I'll give it a go. So first of all, on cards, with the acquisition of the new license, that really has lifted for us a burden, and that burden was a limit on the volume of transactions, the value of transactions we could put through in any one month in Poland. That's now gone away and so we can now go out there and do two things simultaneously which we were prevented from doing under the old license and that is to attract new customers at the same time encouraging existing cardholders to actively use their cards. And for anybody who understands a credit card business, you'll know that keeping your current customers active on their cards is essential. So last year we were in this invidious position where because of the limit, we had to make a choice between do we try and attract new customers and use our available balance there or do we activate existing customers? The new license says you can do both. In terms of the second part of the question, which was new routes to getting customers, no, the truth is we're just going to probably spend more money on marketing, advertising, campaigns, bringing new customers. So that's the second part of the question. The third one was? customers are they behaving the same they're behaving absolutely the same and we've been into it now i suppose a full 18 months going on two years and the behavior we see is very consistent across the piece now it's still if you think about a credit card business to be only two years into your cycle is still very young. So I don't think we should be making any predictions, but everything we've seen to date says that it performs remarkably like an installment loan. And we shouldn't be surprised at that because the car that we have built is modeled to look like an installment loan because essentially that's the way our customers think. I owe a balance. I want to pay it down in installments.

Okay, moving to Mexico and the tech issues that we experienced. Are they specific to Mexico and do you envisage any other tech upgrades in the future?

Well, as part of our budgeting process this year, we agreed to our largest ever commitment to spend on technology in the business. And it's a significant lift, but it's more to do with us and all of our expansion plans that we've talked about over the last probably 40 or 50 minutes. In Mexico specifically, the short answer is no, this doesn't affect any other country because the apps that we're using in Mexico are discreet for Mexico. And what we saw there was this instability. And it was a really important issue for us because we have nearly 10,000 agents, or we call them estrellas, in Mexico every day meeting with their customers. And if you don't provide them with stable technology, It makes their lives very difficult. So we just took the decision. We're just going to rewrite this software. We're going to make it more robust, more stable, more secure, and we'll go forward from there. We've done it, and we're back into growth mode in January already. So it's discrete. It's Mexico. It's not the other businesses.

Okay. So just as a bit of a guide, we're talking five to ten million pounds in terms of CapEx more this year in terms of all those growth plans we want to support.

Okay, another question here. Could you invest even more aggressively to accelerate growth? And are there any brand new market entry plans?

I think you could invest more aggressively, but there is a sweet spot between accelerating and then taking on too much risk and regretting it down the line. You know, it's the old adage, it's easy to give the money away, it's the collecting it in where you make your profit. And that is absolutely true in our case. And Gary's gone through the model that we have in the business in terms of growth and returns and all of that. And we believe that's the right model for us. So we probably could push harder. And I think people are asking us that question because they see the impairment rate being lower than our target range. and saying, why don't you push harder and take more risk? And we will do. And I think this year, Gary, we're going to grow the receivables by... Yeah, 150 million. 150 million.

You know, that's not a small amount. That's pretty, you know, really nice growth in each of the three businesses. But, you know, we've... what we've done over the last two years has put us in the position with Poland with the other businesses to actually now as we say put put the accelerator down and grow but it will be you know we're not we're not going to sort of loosen the credit and we don't need to do those things the growth is there through the product enhancements we're doing distribution channels it's it's there for us to take now and so I think yeah as I say we're really well set to do that now.

Okay. I've got a question here. We've got very good performance on impairments this year and appreciating that we're going to accelerate growth. Do you think that the 14% to 16% impairment rate target is conservative? Is it conservative?

I mean, I think we're probably at the bottom end range of it. I mean, naturally, when you turn from being relatively lowish receivables growth to growing quite strongly, you naturally pick up more impairment because you've got more new customers in the mix. And as everybody knows, you take impairment up front. So we will naturally, even though from our perspective, we're not anticipating credit quality deteriorating, our impairment charge will increase. Now, certainly we wouldn't be expecting to be in the target range next year. But when we're sort of in the middle of our financial model, which we've talked about during 26 into 27, you'd expect the impairment rate to be closer to our target range. And from our perspective, whilst we might be on the lower end of that, We're always looking at the model as a whole. So we're looking at the yield, the cost income ratio, making sure if one's a bit higher than the other one's compensating, et cetera. So no intention of changing the targets. And one other thing that I will mention is clearly In 2024, Mexico didn't grow to the extent that we wanted, as we've discussed. And clearly, Mexico has got a higher impairment rate. And as we grow the Mexican business again through 2024, we're expecting strong growth both there and in digital businesses. That picks up a higher impairment charge. So naturally, your impairment charge goes up, even though the credit quality is still the same.

Okay, back over to Mexico, but this time we've been asked about the peso-related FX losses. Are there any plans to try and reduce that risk going forward?

There's no plans to try and reduce the risk. I think what people have to accept is that for the previous two years, we gained quite substantially. And I think if you look overall, we're still on the right side of that. And we obviously hedge in our local businesses because we match the assets and liabilities. But as a multinational group, we don't hedge the equity that sits at the center. But I think if you look over 10, 15, 20 years, whilst you do get some ups and downs, it always sort of balances out pretty much at the end.

Okay. And another one actually on funding. The current bond could be called in 2026. Would you plan to do so given where it's trading at the moment?

Probably yes, but clearly there's quite a lot of water to flow under the bridge before then. We're really pleased with the Eurobond. We've got a really great set of investors and so that's pretty much in the future. I think before then we've got lots of other great opportunities to supplement our funding. Take the point, I mean clearly we've obviously got the stub of the old Eurobond still outstanding, that might be something we'd look at first, but we're always looking at the funding plan as we move forward.

And where it's trading, hopefully it's putting down a marker for anybody else that says, you know, this business warrants a better coupon on this than what we're currently paying.

I think that's what's important to us. Is the shortfall in revenue compared with the prior year purely related to home credits in Poland? Yeah, predominantly.

It's certainly by far the biggest factor. I mean you've got to look at it on a constant exchange rate basis because clearly relatively we've lost revenue in Hungary and Mexico with the weakening of the currencies. But fundamentally when you're looking at the revenue yield, yes there's been some small changes in digital because of some small rate caps. Mexico home credit is purely about the mix of business. In Europe it's really centered around the fact that we've adapted to the new rate cap on credit cards in Poland.

And then this is our final question, looking at growth again. What are the ambitions for IPF Digital in Australia?

Well I think this one I think I mentioned earlier we probably will come back to this more towards the half year but I and a number of my colleagues went out to Australia last year and we spent some time there and in fact it wasn't time spent talking to our own business it was time talking to lots of market participants and we came back very strongly of the view that there is a huge opportunity for us in Australia and What it's probably about really is brand building. Our customers that deal with us at the moment really like the business. They like the product. All the surveys are really very, very positive. We probably just need to up our spend to get our name higher up that list when people are thinking, I want to borrow some money. Who should I go to? and our name should appear near the top of that list. So I would say give us a little bit of time there. We're working our way through the plans and we'll probably talk about it more at the half year. But in terms of opportunity, it's substantial.

Great. That's it for today.

Well, that was a good list, wasn't it? Yeah. Okay. Thank you, guys. So thank you from us. Thank you for spending your time talking with us this morning. It's a really positive set of results. The balance sheet is in a great position. We've carried really good momentum into 2025, and we look forward to catching up with you all again shortly to talk about our results for the year ahead. Thanks for now.