Operational and Strategic Highlights

Profitability

• Eleving Group closed the first nine months of 2024 with a strong financial performance, recording revenues of EUR 157.9 mln, up by nearly 17% compared to the corresponding reporting period a year ago.
• The Group maintained a diversified portfolio generating a well-balanced revenue stream from all key business segments:
  • Flexible and subscription-based products contributed EUR 34.8 mln to the revenues.
  • Traditional vehicle financing contributed EUR 53.1 mln to the revenues.
  • Consumer lending products contributed EUR 70.0 mln to the revenues.
• The Group's adjusted EBITDA reached a record high for the nine-month period, totaling EUR 65.0 mln, an impressive increase of around 16%, compared to the corresponding reporting period a year ago.
• The net portfolio reached EUR 346.2 mln at the end of Q3 2024, up a respectable 9%, compared to EUR 317.5 mln at the end of the corresponding reporting period a year ago.
• The net profit before FX and discontinued operations generated EUR 25.1 mln during the first nine months of 2024, a notable increase of 15%, compared to the first 9M 2023 (9M 2023: EUR 21.8 mln).
• Total net profit reached EUR 21.9 mln, a remarkable increase of 15%, compared to the corresponding reporting period a year ago (9M 2023: EUR 19.1 mln).
  • Interest and similar income have been the primary drivers of our improved bottom line in the first nine months of 2024, reaching EUR 147.9 mln and increasing by nearly 18%, compared to the first 9M 2023 (9M 2023: EUR 125.9 mln), while portfolio quality has remained excellent with impairment expense increasing only by 7%, compared to the corresponding reporting period a year ago.

Growth

• Following the largest initial public offering (IPO) in the Nasdaq Riga history, Eleving Group is firmly set for future growth:
  • EUR 29 mln were raised, with EUR 27 mln allocated to the primary proceeds and the remaining EUR 2 mln as the over-allotment option.
  • The company reached a post-IPO valuation of EUR 199 mln, based on the IPO price and shares outstanding after the IPO.
  • 47 institutional investors including funds and family offices in the Baltics and Western Europe contributed 72% of the allocated issued shares, while retail investors covered the remaining 28%.
  • Retail investors showed a lively interest in IPO, with 4,466 retail investors subscribing to the company’s shares. Estonian investors led the round with 52%, and Latvian investors added 35% of the total retail investment pool.
• Loan issuance volumes increased to EUR 263.1 mln, an improvement of 26% (9M 2023: EUR 209.5m). The main drivers have been an increased organic demand for our products and further expansion of sales channels with an increased focus on digitalization.
• Eleving Group recorded a significant increase in customer activity in the Vehicle Finance segment. The loan application count during Q3 2024 grew by nearly 18%, compared to Q2 2024, and the nine-month figures leaped by almost 79%, compared to the corresponding reporting period a year ago. Impressive application growth has been recorded across most markets, with East Africa’s motorcycle and the Romanian, Latvian, and Uzbek car financing segments standing out the most. The number of vehicles financed also increased significantly during Q3 2024, resulting in 20% growth, compared to Q2 2024, while the Group maintained prudent underwriting standards. The Group maintained a steady conversion rate of 8.2% in Q3 2024.
• The Group's Consumer Finance business line sets new loan issuance volume records each quarter, reaching a new milestone of EUR 47.9 mln worth of loans issued in Q3 2024, an increase of 7.1% compared to Q2 2024. The Group continued to perform steadily in its mature Consumer Finance markets in Europe, maintaining a stable net portfolio size. At the same time, the growth stems from scaling up the business in the African region, where the loan issuance volume almost doubled, reaching EUR 17.3 mln during Q3 2024, up by EUR 8.4 mln, compared to the corresponding reporting period a year ago (Q3 2023: EUR 8.9 mln). The African Consumer Finance operations issued 7.8% more loans compared to Q2 2024, setting a new quarterly loan issuance record. This was achieved while maintaining stable conversion rates for all Consumer Finance products, which only marginally increased by 1.3% p.p. to 35.8% in Q3 2024 (Q2 2024: 34.5%).

Operational Milestones

• OX Drive, the first electric car-sharing service in Latvia, and Carguru, the pioneers of the Latvian car-sharing business, have merged their operations. The OX Drive operations will continue to work under the Carguru brand. This merger strengthens Carguru's market position, with a fleet of over 420 vehicles, and establishes the company among the leading players in the Latvian car-sharing space. Eleving Group now holds approximately 36% of the combined entity.
• Eleving Group is further driving green mobility in Africa, with our East African motorcycle business rapidly expanding in the e-motorcycle financing segment. By the end of Q3, we financed 1,400 e-motorcycles and aim to reach 2,000 units by the end of the year. Uganda is leading the way, with 776 units issued since the launch of the e-motorcycle financing product in May 2024. The demand for green mobility solutions remains robust across the Sub-Saharan region.
• Eleving Group was ranked the 41st fastest-growing European company of the last decade in the Financial Times and Statista research. This list ranks the top 300 companies in Europe based on their percentage revenue growth between 2013 and 2023, focusing primarily on organic growth during this period. We are the highest-ranked company from the Baltics and the only Latvian company featured on the entire list of ‘Europe's Long-Term Growth Champions 2025’. 
• Eleving Group continues its digitalization journey, and our new generation 2.0 digital solution (customer self-service platform) has been introduced in Estonia and Lithuania. The solution has been a great success in Romania, with nearly all the portfolio now managed online. The Group is optimistic about the planned rollouts in Latvia and the Caucasus at the end of this year.

Financial Highlights and Progress

• Consistent profitability as evidenced by the strongest-ever nine-month financial performance:
  • Adjusted EBITDA of EUR 65.0 mln (9M 2023: EUR 56.0 mln).   
  • Net profit before FX 25.1 mln (9M 2023: EUR 21.8 mln).  
  • Total net profit of 21.9 mln (9M 2023: EUR 19.1 mln).
  • Total net loan and pre-owned vehicle rent portfolio of EUR 346.2 mln (9M 2023: EUR 317.5 mln).
  • 9M 2024 ended with a healthy financial position, supported by the capitalization ratio of 25.6% (31 December 2023: 26.1%), ICR ratio of 2.3 (31 December 2023: 2.3), and net leverage of 3.4 (31 December 2023: 3.7), providing sufficient headroom for Eurobond covenants.   
• During Q3 2024, Eleving Group started and, in early October, finished the largest IPO in the Nasdaq Riga history, raising EUR 29 mln to further facilitate business expansion in new markets, launching new products and optimizing the capital structure. We forecast saving up to EUR 4 mln in annual borrowing costs by retiring unsecured subordinated bonds, repurchasing some of Mintos outstanding loans in Q4 2024, and expecting improvements in overall borrowing costs due to a significantly recapitalized balance sheet.
• Eleving Group remains focused on its strategic direction to further diversify its debt profile and funding through various channels, primarily in local currencies, and optimizing funding costs both in EUR and USD currencies:
  • The Group continues its pragmatic tapping into Mintos, a marketplace for loans. The weighted average annual funding cost for Mintos was 9.8% over Q3 2024, compared to 12.6% over the corresponding reporting period a year ago, significantly reducing the Group's interest expense and further improving its profitability. At the end of Q3 2024, Eleving Group had outstanding loans of EUR 63.6 mln on Mintos (compared to EUR 62.7 mln as of 30 June 2024), an increase of EUR 0.6 mln.
  • Outstanding investments raised through the Kenyan local notes program increased by around 28%, from EUR 16.0 mln to EUR 20.5 mln during Q3 2024. Most of this funding is secured in the local currency.
  • Eleving Group has secured a debt facility in the local currency equivalent of around EUR 4.75 in Uganda from Absa Bank to support further its capital structure and growth of the vehicle finance portfolio in the Ugandan market.
  • Throughout Q3 2024, the Group raised a total of BWP 42.9 mln (approximately EUR 3.0 mln) in Botswana from Morula Capital Partners and Kgori Capital Partners at favorable rates through the local notes program. All this funding is secured in the local currency.
• During Q3 2024, the Group increased its equity to EUR 87.9 mln (EUR 87.4 mln as of 30 June 2024), further solidifying its capital base for future growth.

Modestas Sudnius, the CEO of Eleving Group

“The third quarter of 2024 marks a transformative time for Eleving Group, highlighted by our initial public offering (IPO) — the largest in Nasdaq Riga’s history and a milestone for a privately held company in the Baltics. We are deeply grateful to welcome over 4,500 new shareholders, a balanced mix of institutional and retail investors from the Baltics and beyond. This IPO success has provided us with EUR 29 mln, which we will use to drive our plans to nearly double the business over the next three years. In the immediate term, we are focusing on using these proceeds to strengthen our balance sheet and optimize funding costs.

Our diverse product portfolio remains a key driver of performance. Revenue from traditional loan products grew by 11.3%, driven by strong portfolio expansion in Romania and steady gains in Georgia, Moldova, and Estonia. While flexible and subscription-based products saw a controlled revenue decrease due to the anticipated slowdown in Lithuania’s rent-to-buy segment and a more cautious lending strategy in Kenya’s motorcycle-taxi business, Uganda’s motorcycle-taxi segment maintained robust growth. Consumer lending revenues surged in Q3, fueled by rapid expansion in Sub-Saharan markets and further growth in Albania.

On the business development side, our strategic approach is yielding results and promises even more growth. We made significant progress in financing electric motorcycles in Uganda and Kenya, contributing to sustainable mobility in East Africa. As we explore new market opportunities and innovative products, we remain committed to expanding accessible and eco-friendly solutions. Our electric-motorcycle financing markets are on track to meet this year’s targets, with nearly 2,000 e-motorcycle units expected to be financed by year-end. Additionally, we are actively evaluating new product concepts for our mature markets and potential entries into new geographies with our established offerings. We anticipate tangible results from these initiatives in the coming year.

Our digitalization journey continues to advance, enhancing client accessibility. After successfully launching a self-service platform in Romania that has significantly improved portfolio management and client relations, we localized this platform in Estonia and Lithuania. Georgia, Latvia, Moldova, and Armenia are next in line for rollout by year-end.

It is worth noting that our growth to date was recognized in October by the Financial Times, which ranked Eleving Group 41st among the Fastest-Growing European Companies over the past decade. We are the highest-ranked company from the Baltics and the only Latvian company on the 'Europe's Long-Term Growth Champions 2025' list.

The third quarter was another strong operational period for Eleving Group, marked by the historic milestone of our IPO. As we move forward, we aim to sustain our profitable growth trajectory as a public company focused on sustainable expansion.”

Maris Kreics, the CFO of Eleving Group

“Our 9M results reflect continued growth and a strong operational focus. Revenue reached EUR 157.9 mln, a 17% increase compared to the first nine months of last year, and our net portfolio grew to EUR 346.2 mln, marking a 9% increase compared to the same period last year. Adjusted EBITDA rose to EUR 65.0 mln, and net profit was EUR 21.9 mln, up from EUR 19.1 mln in 9M 2023.

One of our most significant milestones this year was completing the largest IPO in the Baltics, raising EUR 29 million. This capital infusion will support our mid-term goals to expand into new markets, strengthen our position in existing ones, and enhance our balance sheet. Consistent with our IPO pledge, we are committed to rewarding both new and existing shareholders with regular dividend payments. Following the IPO, we aim for a target payout ratio exceeding 50% of net profits.

To strengthen our capital structure, we are strategically diversifying our debt portfolio. Following the IPO, a portion of the net proceeds will be allocated to redeem our subordinated unsecured bonds 2021/2031 (ISIN XS2427362491). This targeted move is expected to deliver nearly EUR 2 million in annual savings, directly boosting our profitability. Additionally, in Q3, we secured a EUR 4.75 million loan from Absa Bank, one of Africa’s leading financial institutions, to fuel our portfolio expansion in Uganda, advancing our growth and solidifying our presence in this high-potential market.

These financial achievements and strategic initiatives have reinforced our foundation for sustained growth, enabling us to drive greater operational efficiency and ensure long-term profitability.”

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

Conference Call:

A conference call in English with the Group's management team to discuss the results is scheduled for 12 November 2024 at 15:00 CET.

Link to register for a conference call can be foundhere.

Eleving Group

Edgars Rauza, Eleving Group Investor Relations Manager
Email:edgars.rauza@eleving.com

About Eleving Group

Eleving Group has driven innovation in financial technology around the world since its foundation in Latvia in 2012. As of today, the group operates in 16 markets and 3 continents, encouraging financial inclusion and upward social mobility in underserved communities around the globe. Eleving Group has developed a multi-brand portfolio for its vehicle and consumer finance business lines, with around 2/3 of the portfolio comprising secured vehicle loans and mobility products, with Mogo as the leading brand, and around 1/3 of the portfolio including unsecured consumer finance products. Currently, 55% of the group's portfolio is located in Europe, 32% in Africa, and 13% in the rest of the world.

The Group's historical customer base exceeds 1.3 million customers worldwide, while the total volume of loans issued is nearing EUR 1.9 billion. With headquarters in Latvia, Lithuania, and Estonia and a governance structure in Luxembourg, the Group ensures efficient and transparent business management, powered at the operational level by over 2820 employees. For two consecutive years, the Group was listed among Europe’s 1000 fastest-growing companies published by the Financial Times in 2020 and 2021, while in 2024, Eleving Group was ranked as the 41st fastest-growing European company in the last decade in 'Europe's Long-Term Growth Champions 2025' research by Financial Times and Statista.

Read more: www.eleving.com

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.