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docuformas.mx Docuformas Corporate Presentation 2018
docuformas.mx
Docuformas
Corporate Presentation 2018
docuformas.mx
Disclaimer
This document may contain certain forward-looking statements. These statements are non-historical facts, and they are based on the current vision of the Management ofDocuformas S.A.P.I. de C.V. for future economic circumstances, the conditions of theindustry, the performance of the Company and its financial results. The terms "anticipated","believe", "estimate", "expect", "plan" and other similar terms related to the Company, aresolely intended to identify estimates or predictions. The statements relating to theimplementation of the main operational and financial strategies and plans of investment ofequity, the direction of future operations and the factors or trends that affect the financialcondition, the liquidity or the operating results of the Company are examples of suchstatements. Such statements reflect the current expectations of the management and aresubject to various risks and uncertainties. There is no guarantee that the expected events,trends or results will occur. The statements are based on several suppositions and factors,including economic general conditions and market conditions, industry conditions andvarious factors of operation. Any change in such suppositions or factors may cause theactual results to differ from expectations.
All figures are expressed in Mexican Pesos ($) unless otherwise stated, and were preparedin accordance with the requirements from the National Banking and Securities Commission(CNBV). Figures for year ended 2015, 2016 and 2017 were assessed by independentauditors Galaz, Yamazaki, Ruiz Urquiza, S.C. (Members of Deloitte Touche TohmatsuLimited).
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Docuformas’ Key Milestones
Docuformas acquires ARG, a leasing company specialized in transportation , creating the #2 biggest independent leasing player in Mexico.
Initial integration of the ARG acquisition.
Docuformas acquires ICI, expanding into the real estate lending business, and finalizes the ARG integration.
Docuformas taps international markets, issuing U.S. $150 million senior notes with 9.25% coupons.
1996 2006 2008 2010 2012 2014 2015 2016 2017 2018
Docuformas isfounded by AdamWiaktor with afocus on Xeroxleasing equipment.
Docuformas taps local capital markets, becoming the first mid-sized company to issue local debt in the Mexican Market.
Colony Capital(formerly Aureos) invests in Docuformas.
Docuformas issues structured public debt secured by its receivables.
Master Franchise Agreement is signed with Liquid Capital Corp and Liquid Capital Mexico is born.
Colony Capital and Alta Growth Capital invest U.S. $27 million in Docuformas. Counterparty rating increment to “BB-”
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Docuformas at a Glance
• Leading independent leasing company in
Mexico, providing specialized financing
including leases, loans and factoring.
• Experienced management team, focused on
profitable growth, robust risk management and
compliance with high governance standards
• We target the rapidly growing and under-banked SME segment.
• Tailored products to finance specializedproductive assets.
• Personalized assessment and quick responsetime to clients.
Competitive Advantages:
1
2
3
Portfolio Breakdown
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85%
14%1% Leasing Portfolio
Credit & FactoringPortfolio
Services Portfolio
Key Financial Indicators 2016 2017 12M18
R O A A 4.6% 2.5% 2.4%
R O A E 29.2% 18.4% 14.8%
Financial Debt / Stockholders´ Equity 4.3x 5.6x 3.7x
Net Financial Debt / Stockholders´ Equity 3.7x 3.9x 2.9x
Capitalization (SE/TA) 15.1% 13.0% 19.0%
Stockholder' Equity/ Total Portfolio 17.1% 17.2% 24.0%
Leasing Portfolio / Total Portfolio 78.6% 91.8% 85.3%
Total Portfolio / Financial Debt 1.4x 1.0x 1.1x
Total Portfolio / Net Financial Debt 1.6x 1.5x 1.5x
Current Assets/ Current Liabilities 1.1x 2.9x 2.3x
Financial Debt (MXN$mm) 2,856 4,443 5,178
Net Financial Debt (MXN$mm) 2,427 3,135 3,957
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Leading and Established Leasing Specialist
A differentiated and established platform
The industry is characterized by "barriers to scaling"rather than “barriers to entry”, where players' lack ofaccess to financing stands out.
23 years of experience meeting the needs of SMEs in Mexico.
Tailor-made systems and technology.
Mix of third-party and in-house IT solutions.
Robust and efficient origination and collections processes.
Purchasing power with equipment manufacturers, dealers and suppliers.
Access to multiple, reliable and competitive funding sources.
Focus on employee developmentthrough constant training systems.
7. Highly experienced team
6. Consistent revenue growth & profitability
2. Rapid origination
5. Prudent leverage policy
4. Efficient operating platform
1. Diverse product strategy
3. Diversified portfolio
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Corporate Structure and recent Capital Injection
Shareholder Prior New
Adam Wiaktor 67.9% 14.5%
Aureos Latin America Fund I and Fondo Aureos Colombia
32.1%
Alta Growth Capital Fund 35.7%
CKD (Colony Capital) 24.9%
Abraaj Thames B.V. (The Abraaj Group)
24.9%
Total 100% 100%
New investment previously reported of US $27million was completed during the 3th and 4thquarter 2018.
Mr. Adam Wiaktor continues as CEO ofDocuformas as well as a member of the Boardof Directors
35.7%
Corporate Structure
Adam Wiaktor
Docuformas, S.A.P.I. de C.V.
Analistas de Recursos Gobales, S.A.P.I. de C.V.
Rentas y Remolques de México, S.A.P.I. de C.V.
Inversiones y Colocaciones Inmobiliarias, S.A.P.I. de C.V.
14.6%49.8%
99.9%
99.9%
99.9%
Colony Capital funds
Alta Growth Capital funds
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Well-Designed and Flexible Product Offering•
Leasing
Capital• Product lease with option to purchase
at the end of the term. 24-36 months
MXN $1-40mm
Equipment• Product lease without option to
purchase at end of the term.
Real Estate• Sale and lease back of real estate
assets.
5-7 years
MXN $15-60mm
Renting• Equipment leasing with supplies,
service and maintentance.
12-36 months
MXN $1-10mm
Factoring• Discounting A/R and provision of
vendor-financing and revolving credit lines.
30-60 days
MXN $1-20mm
Financing
Cash • Secured and unsecured cash loans as
non-asset-based lending.24-36 months
MXN $1-40mmEquipment
• Purchase and resale or lease of equipment with financing. Equipment serves as collateral.
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Underserved Mexican SME Market
Characteristics of our clients
• Underbanked.
• Not price sensitive.
• Receptive to good service, including:
Approval speed.
Flexibility around customized solutions.
• Drawn to:
Simpler documentation.
No covenants.
Tax shield provided by lease payments.
Note:Sourced from INEGI & CNBVSourced from worldbank.org
97.4%
12.9%
2.6%
87.1%
% of entities % of loansSME Other
Underserved Mexican SMEs
SME entities (% of entities in 2015) and SME loan participation (% of loans in 2016)
1
Financing the Mexican SMEs is an attractive opportunity with significant growth potential.
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docuformas.mx
Leasing portfolio (% of 2016 GDP)
Underserved Mexican SMEs
Underpenetrated financial system
Opportunity for financing, particularly in the leasing space
192.7%
112.1%62.2% 47.2% 36.2% 35.0%
Domestic credit to the private sector (% of 2016 GDP)
8.5%
2.4% 2.0% 1.7%0.7% 0.2%
Why are SME clients underbanked?
Banks are not set up to cater to SMEs' needs.
Banks have heavy fixed cost structures that make SMEs unattractive clients due to smaller “ticket size”.
Banks' reputational and legal risk burden makes KYC* requirements onerous.
Banks have stricter reserve and capitalization requirements.
Note:KYC: “know your customer”Sourced from INEGI & CNBVSourced from worldbank.org
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Powerful and Effective Go-to-Market Model
Geographic reach extends beyond physical presence
Portfolio Presence
Presence in 30 states, over 93% of the
country.
Client knowledge drives credit quality and recurring business
Salesperson responsibilities:
Clients per Business Unit is limited to 30, and potential credit risks are spotted early on through communication with clients at least once a month.
Incentive-based compensation.
~60% of lease approval cases correspond to recurring clients.
Adversity to government risk through geographic diversification.
CollectionProcess
OriginationRelationshipManagement
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Effective Direct and Indirect Sales Forces
Sales force made up of 120+ professionals.
Others (+17)
+50 external brokers
Indirect Sales Force
Vendors
Brokers
Indirect sales forceDirect sales force
Strong team on the ground
Directors (3)
Managers (11)
Business Units / Marketing and Contact (41)
Sample team
structure
Direct SalesImplants (Mobile
team)8 Branches
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Fast and Disciplined Credit Approval
Credit approval process
Note:1 Turnaround time measures days of processes for which Docuformas’ is responsible.
Credit package Risk analysesCredit
committee Legal reviewDocumentation
and closing
Constant communication with potential clients throughout the assessment process
• Credit process enables turnaround times of 5 to 15 business days1, significantly faster than a traditional bank.
• Independent members strengthen the Credit Committee.
• The Company follows strict risk assessment processes incorporating quantitative and qualitative parameters.
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Efficient Collection Process
The collection process is greatly facilitated by Docuformas maintaining ownership of leased assets.
Invoice Current Past dueNon-performing/ repossession
Automatically generated on the 5th day of every month
(<30 days) (31 to 90 days) (>90 days)
Contracts are marked as non-performing
Invoice Generation.
Payment received by the end of the month.
No payment received by the end of the
month.
Payment or revised payment schedule
negotiation.
Failure to pay within 90 days of receiving
invoice.
Payment or revised payment schedule
negotiation.
Repossession, re-lease or sale after
120 days.
3
?
3
?
3
?
Variable compensation structure incentivizes successful collection.
Constant dialogue enables Business Units to spot credit
risks early on.Negotiations are facilitated by
pledged assets & guarantees as well as legal action and
repossession. Assets generally have strong secondary markets.
Business units are responsible for the collection process and are in constant communication with clients.
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933 1,005
1,414
2016 2017 2018
Origination and Top-Line Growth
Top-line expansion
Strong portfolio growth
Portfolio (MX$mm)
Note:1 Run-off is defined as the minimum contracted payments that were expected to come due as of the end of the previous period (See Notes 7, 8 and 9 of the Audited Financial Statements).2 Net origination is defined as portfolio originated and acquired throughout the year, net of run-off from portfolio originated within that year.
Total revenues (MX$mm)
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Consistent top line growth year over year since its inception ,due to:
Specific target market Competitive go to market strategy
Strong corporate practices Experienced management
3,648
1,396
1,631 3,883
1,856
2,603 4,630
1,927
3,086 5,789
2015 Run-off¹ Origination² 2016 Run-off¹ Origination² 2017 Run-off¹ Origination² 12M18
docuformas.mx
531
396 466
25.4%
20.5%19.4%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
-
100
200
300
400
500
600
2016 2017 12M18
Gross Profit OPEX as % of revenues
Solid Gross Profit Growth with Positive Bottom-Line
ProfitabilityImproving EfficiencyMXN$mm
15
MXN$mm
181
132
162
2016 2017 12M18
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36%
24%
12%
8%
8%
13%
Industrials
Consumer Discretionary
Health Care
Materials
Information Technology
Others
38%
23%
7%
5%
27%
Mexico City Mexico State
Nuevo Leon Queretaro
Other28%
15%37%
8%
10%
3%
> 100 50 - 100
10 - 50 5 - 10
1 - 5 < 1
Diversified Portfolio Across Clients and Industries
Our diversified portfolio minimizes exposure to single names.
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Portfolio Distribution by Ticket Size
Portfolio Distribution by Zone Portfolio Distribution by Sector
docuformas.mx
Robust Asset Quality
Ratio of non-performing leases (%)Non-performing lease portfolio1 / total portfolio
Coverage ratio (%)
Ending reserves / Non-performing lease portfolio1
Write-offs (% of portfolio)Write-offs / Total portfolio
Note: 1 Non-performing lease portfolio is defined as past-due capital leases, operating leases, equipment financings, factoring or cash financing loans, calculated as of the
first day such capital leases, operating leases, equipment financings, factoring or cash financing loans are more than 90 days in arrears
• Focus on productive assets minimizes the risk of non-payment.
• Strong secondary market for productive assets.
• Collateral is executable and disposable.
• The Company maintains insurance policies covering 100% of its underlying assets.
• Guarantees on assets minimize “real loss”, reinforced by a conservative approach to NPLs.
Mitigants
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5.9% 6.0% 6.0%
5.3%
2015 2016 2017 12M18
53%68%
60% 65%
2015 2016 2017 12M18
0.7%
0.0%
0.9%
0.6%
2015 2016 2017 12M18
docuformas.mx
Strong Balance Sheet
Ample Capitalization
Disciplined Leverage
(Total stockholders equity / assets)
(Total financial debt / total shareholders equity)
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15.1%13.0%
19.0%
2016 2017 12M18
Capitalization Ratio
4.3x5.6x
3.7x
2016 2017 12M18
Leverage Ratio
Financial Debt
docuformas.mx
Well-Diversified Sources of Funding and Adequate Run-off
Current Debt Maturity Schedule (MX$mm)
FX risk has been fully hedged
Notes:1 Receivables represents the total minimum future contractual payments due from our customers
Receivables1 and Financial Debt Schedule Next 5 Years
Portfolio run-off >debt amortization in next 5 years
Well-diversified Sources of FundingFinancial debt (MX$mm)
19
40%
6% 13%
41%
21%24%
18%
74%63%
2016 2017 12M18
Debt
Short Term Debt
Long Term Debt
Securitizations & notes
2,282
1,339 1,019
597 551 677 448
669
3,086
298
30% 33%66%
517%
54%0%
100%
200%
300%
400%
500%
600%
-
500
1,000
1,500
2,000
2,500
3,000
3,500
1y> 2y> 3y> 4y> 5y <
Portfolio Debt Debt/portfolio
677 448
669
3,086
298
12m 24m 36m 48m 60m
Bond Securitization
Credit Suisse Bank & Other
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4.4%
3.5%
2.3% 2.5%
2015 2016 2017 12M18
High Levels of Operational Efficiency
Workforce has been optimized following the ARG acquisition
Strong levels of operational efficiency have historically been achieved
The sales force operates under a variable compensation structure
Headcount evolution (# of employees) Incentive-based compensation breakdown (%)
Administrative expenses / total assets (%) Efficiency ratio (%)1
Compensation structure aligns incentives
Business Units are in charge of collection process as well as origination
Constant dialogue improves credit risk
Note:1. Efficiency Ratio is defined as operating expenses divided by Gross Income
Collection 2/3
Origination 1/3
20
137101 90 77
75
7658
57
2015 2016 2017 12M18
Corporate Sales
48.9% 44.7%52.0%
59.0%
2015 2016 2017 12M18*
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Experienced Management - Strong Corporate Governance
Highly qualified Board of Directors
Strong Corporate Governance practices
Management team with more than 12 years of experience on average.
The board of directors is comprised of 8 members.
Robust corporate governance gives Docuformas an edge versus its peers.
Miguel ÁngelOlea Sisniega
Eduardo Cortina Murrieta
Experienced Management Team
Name PositionYears of
ExperienceYears at
Docuformas
Se
nio
r M
an
ag
em
en
t
Adam P. Wiaktor
Chief Executive Officer 33 23
Alejandro Monzó
Deputy CEO 20 1
Hector Esquivel
Chief Financial Officer 30 3
Eduardo Limón
Investor Relations Officer
27 12
Ricardo Vazquez
Human Resources Director
19 4
Gerardo Gutierrez
Chief Technology Officer 38 5
Alejandro Pacheco
Director of Credit 25 4
Patricia Barrera
General Counsel 18 4
Antonio Bañuelos
Structuring and Collections Director
21 12
GumersindoChavez
Procurement Officer 36 13
Erika Nuñez Process Director 16 5
Sales
Danilo Sarrelangue
Sales Director 22 19
Carlos Durán Sales Director 22 6
Name Position
Miguel Ángel Olea Sisniega President
Eduardo Cortina Murrieta Advisor Colony
Ignacio Gómez-Urquiza Advisor Colony
Erik Carlberg y González de la Vega Advisor Alta
Javier García-Teruel Ávila Advisor Alta
Alejandro Renteria Villagomez Advisor Alta
Adam Wiaktor Rynkiewicz Advisor
Miguel Ángel Noriega Cándano Independent Advisor
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Investor Relations Contact Information
Contact Information
For more information visit
www.docuformas.mx
or contact:
Miranda Investor Relations
Ana María Ybarra Corcuera
+52 1 (55) 3660 4037
Eduardo Limón
Investors Relation Officer
+52 (55) 4324 3434
Ramón Barreda Barrera
Investors Relation Deputy Director
+52 (55) 5148 3600 / (55) 9178 6370
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Financial Summary
docuformas.mx
Financial and Operating Summary
Key metrics and financial highlights
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*In millions of pesos
Financials Metrics (in millions of pesos) 2016 2017 12M18Total Revenues 933 1,005 1,414 Cost of Revenues 402 609 948 Gross Profit 531 396 466 % 57% 39% 33%Operating Expenses 237 207 275 Net Income 181 132 162 % 19% 13% 11%
Operating Metrics (in millions of pesos) 2016 2017 12M18Total Portfolio 3,883 4,630 5,789 Leasing Portfolio 3,052 4,250 4,939 Credit & Factoring Portfolio 709 290 784 Services Portfolio 122 89 65 NPL 6.0% 6.0% 5.3%
Real Estate Portfolio 271 510 726 Total Portfolio including Real Estate 4,154 5,140 6,515
Financial Indicators 2016 2017 12M18R O A A 4.6% 2.5% 2.4%R O A E 29.2% 18.4% 14.8%Financial Debt / Stockholders´ Equity 4.3x 5.6x 3.7xNet Financial Debt / Stockholders´ Equity 3.7x 3.9x 2.9xCapitalization (SE/TA) 15.1% 13.0% 19.0%Stockholder' Equity/ Total Portfolio 17.1% 17.2% 24.0%Leasing Portfolio / Total Portfolio 78.6% 91.8% 85.3%Total Portfolio / Financial Debt 1.4x 1.0x 1.1xTotal Portfolio / Net Financial Debt 1.6x 1.5x 1.5xCurrent Assets/ Current Liabilities 1.1x 2.9x 2.3xFinancial Debt (MXN$mm) 2,856 4,443 5,178Net Financial Debt (MXN$mm) 2,427 3,135 3,957
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Income Statement
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REVENUES 2016 2017 12M18Interest on capital leases 558 563 675Equipment financing 170 296 546Operating leases 196 145 193Factoring 9 1 0Total income 933 1,005 1,414
COSTSInterest expense 214 351 511Equipment financing 88 151 344
Depreciation of assets under operating leases 100 107 93
Total costs 402 609 948
GROSS INCOME 531 396 466Selling expenses 22 17 25Administrative expenses 153 142 180Allowance for loan losses 63 48 70Operating expenses 237 207 275
OPERATING INCOME 293 189 191Other (income) expenses, net (0) (2) 9
Interest income (2) (88) (10)Interest expenses 50 58 49Net exchange loss (profit) 9 135 (5)
Valuation of derivative financial instruments (5) 10 (44)
Comprehensive financing result 52 115 (10)
INCOME BEFORE INCOME TAXES 242 76 192Income taxes 61 (56) 30NET INCOME 181 132 162
*In millions of pesos
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Balance sheet*In millions of pesos
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ASSETS 2016 2017 12M18
Current Assets
Cash and cash equivalents 429 1,308 1,221
Accounts receivable 1,545 1,115 1,277
Allowance for loan losses 0 164 198
Taxes due from 116 107 191
Sundry debtors 22 27 28
Related parties due from 19 3 37
Other assets 37 65 31
Inventory 0 0 11
Total current assets 2,168 2,789 2,994
Non-current assets
Property-furniture and equipment - net 651 870 1,059
Long-term receivable 1,300 2,131 2,899
Other assets 81 169 178
Derivative financial instruments 19 10 -2
Goodwill 164 163 163
Total non-current assets 2,215 3,343 4,297
Total assets 4,383 6,132 7,291
LIABILITIES 2016 2017 12M18
Current liabilities
Current portion of long-term debt 1,254 256 677
Accounts payable 94 163 33
Sundry creditors 283 381 551
Due to related parties 273 75 9
Income taxes and other taxes payable 49 94 29
Total current liabilities 1,953 969 1,299
Non-current liabilities
Long-term debt 1,602 4,187 4,501
Deferred income tax 165 181 181
Derivative financial instruments 0 0 -77
Total non-current liabilities 1,767 4,368 4,605
Total liabilities 3,720 5,337 5,904
STOCKHOLDERS' EQUITY & RESERVES
Capital stock & retained earnings 482 663 1,322
Valuation of derivative financial intstruments 0 0 -97
Current year net income 181 132 162
Total Stockholders' equity and reserves 663 795 1,387
Total liabilities and stockholders' equity and reserves 4,383 6,132 7,291
Capital stock & retained earnings 482 663 1,322
