Pre Investor Day - Notes from Q&A session

A few notes from the Morgan Stanley Q&A session with Rebecca James from HUMM

HUMM’s main focus is to provide easy initial plans for BNPL, but the focus remains with bigger ticket transactions (>$500). HUMM is no 1 in AUS/NZ in this space.

UK Rollout in three phases:
Phase 1: Smaller ticket transactions June/2021, leveraging off Irish merchant base.
Phase 2: Up to UK Pounds 3,000 Oct/2021 (next week), with up to 12 months payback period.
Phase 3: Up to UK Pounds 30,000 Q1/2022, with very flexible terms and 24 – 60 months payback period.

Canada Rollout:
Attraction of Canada is the good regulatory situation, allowing very easy transfer of current technology in to this market. Current market situation consists of ‘white label’ cards by wholesaler. There is a massive decline in the use of these cards and this space is being targeted by HUMM. ‘This is providing a wealth of opportunity’ – she said.
The average spend on these cards is between C$2,500 and C$4,000.

Global Opportunities:
HUMM has a very low cost of funds, creating a competitive advantage for this expansion.

Credit Research:
HUMM has invest big dollars in credit research and the benefits are showing in a halving of credit losses.

Transaction Frequency:
The product offerings are very sticky and the number of transaction are increasing very well.

US Market:
The US Market is very complex, but this does not mean HUMM will not enter it. Just not now.

Asian Market:
The growth in Asia will be centred around partnering. This will be one of the growth pillars.
There are a number of current conversations with Banks, large wholesalers and others.

Westpac – NZ Partnership:
HUMM owns the customers.

Dough:
Strategic partnership. HUMM is waiting for the Dough customer base to grow before leveraging the launch of a larger customer base.

Investor Day:
One item to be covered is how HUMM values itself. The non-BNPL business is valued using PE multiple, but the BNPL business should be valued on a revenue multiple.
The Bigger Things offering is not really competing with other BNPL providers, but with the traditonal loan market.

I hope these notes are not too random and provide you with some insight into HUMM and its future progress.

Cheers,
IHS