Aeon Credit Service (m) Bhd. · MYX:AEONCR
Aeon Credit Service (m) Bhd — Q3 FYE2021 Earnings Presentation
33 slides from Aeon Credit Service (m) Bhd's earnings presentation, Dec 22, 2020
Slide 1: Q3 / 9M FYE2021 Results Update
Listing Board : Bursa Malaysia Securities Berhad, Main Market Stock Name/ Code : AEONCR / 5139 Q3 / 9M FYE2021 Results Update 22 December 2020
Slide 2: Disclaimer
Disclaimer This document has been prepared by AEON Credit Service (M) Berhad (“AEON Credit” or the “Company”) solely for the use at the presentation to analyst and fund managers. The information contained in this document has not been independently verified. No representation or warranty, whether ex
Slide 3: Table of Content
Table of Content 01 03 02 Key Operational Highlights Financial Updates Overview 3
Slide 4: Key Highlights
JEON yza3, ACON CREDIT SERVICE CREDIT SERVICE Key Highlights
Slide 5: Key Highlights
Key Highlights I Looking Ahead with Embarking on Advancing the Long Term Growth Recovery Journey IT Adoption Strategies Focus on asset quality enhancement, Transform physical and conventional Continuous support for existing prudent cost management by leveraging processing to online customers needs a
Slide 6: Financial Overview
JEON yza3, ACON CREDIT SERVICE CREDIT SERVICE Financial Overview
Slide 7: Performance Highlights: 9M FYE21
Performance Highlights: 9M FYE21 Reflecting the macro environment impacts, holding key ratios in check 9M 9M YOY FYE20 FYE21 Change PAT RM203.7M RM120.2M -41.0% Profitability ROE (annualised) 17.3 % 9.7% -7.6% Transaction & Financing Volume RM4.7B RM3.0B -37.4% Asset Gross Financing Receivables RM10
Slide 8: Income Statement
Income Statement Transaction & Financing Volume continued to show sign of recovery QoQ; Revenue growth started to turn positive QoQ Total Transaction & Financing Volume (RM mil) Revenue (RM mil) Emphasis on asset quality while prudently growing new sales Higher interest income in the absence of Day-
Slide 9: Shareholder Value & Capital Management
Shareholder Value & Capital Management ROA & ROE improved marginally QoQ; CAR remains healthy Gross Receivables (RM mil) ROA (%) 10,518.5 2.9 10,259.4 10,222.0 10,033.0 1.6 -0.4% QoQ 1.5 1.0 +0.1% QoQ +1.9% YoY -1.3% YoY Q3 Q1 Q2 Q3 Q3 Q1 Q2 Q3 FYE20 FYE21 FYE21 FYE 21 FYE20 FYE21 FYE21 FYE21 ROE (%
Slide 10: Total Transaction & Financing Volume
Total Transaction & Financing Volume Personal Financing led the growth significantly by 813.9% as branches resume marketing activities Volume (RM mil) Q3 Q1 Q2 Q3 Products (%) QoQ YoY FYE20 FYE21 FYE21 FYE21 23 Credit Card -4.5 -18.4 4 92 Personal Financing +813.9 -37.9 236 38 Motorcycle Financing +
Slide 11: Total Financing Receivables
Total Financing Receivables Receivables registered +1.9% YoY under the challenging environment Receivables Movement (%) QoQ YoY Gross Receivables (RM mil) Credit card +1.1 -5.0 Q3 Q1 Q2 Q3 Personal Financing -1.5 -6.2 FYE20 FYE21 FYE21 FYE21 Motorcycle Financing +2.4 +12.1 Auto Financing -1.6 +3.1 5
Slide 12: Receivables Collection
Receivables Collection Customer repayment behaviour changed post MCO; showed positive recovery Receivables Collection Trend 100.00% 97.86% 97.85% 97.57% 97.97% 98.14% 97.90% 98.01% 98.06% 98.60% 96.31% 96.90% 95.56% 96.12% 88.54% 90.00% 83.20% 83.39% 81.89% 82.58% 82.85% 81.06% 81.80% 81.24% 86.23%
Slide 13: Non-Performing Loans (NPL)
Non-Performing Loans (NPL) Resulted from temporary change in written off criteria; asset quality strategies have been in place to keep the trend at manageable level NPL Trend 18,000 2.48 2.05 1.93 1.95 2.88 16,000 14,000 10,259 10,222 12,000 10,033 1.00 10,000 8,000 8,313 6,000 7,203 4,000 2,000 0 0
Slide 14: Net Credit Cost (NCC)
Net Credit Cost (NCC) Higher impairment loss (IL) and bad debt recovered which reflecting the repayment condition in Q3 NCC Trend 250 4.58 4.65 6 200 3.43 3.91 5 123 4 150 2.08 90 3 100 61 77 2 50 39 1 0 0 -1 Q3 Q3 Q3 Q2 Q3 FYE18 FYE19 FYE20 FYE21 FYE21 NCC (RM mil) NCC - MFRS 9 (%) Q3 Q3 Q3 Q2 Q3 (
Slide 15: Impairment Loss (IL) Analysis
Impairment Loss (IL) Analysis Higher impairment loss due to end of AEON Relief Programme (ARP) 250,000 12,000 10,033 10,259 10,222 200,000 10,000 8,313 150,000 8,000 Provisioning increased on existing delinquent 100,000 101,043 6,000 accounts (D1-D6) due to 47,196 74,019 billing delinquency started
Slide 16: IL Analysis
IL Analysis Increased provisioning on existing delinquent accounts Q3 Q3 9M 9M Breakdown of YoY YoY No FYE20 FYE21 FYE20 FYE21 1. Lower bad debts written off IL RM’000 % RM’000 % lower attributed to temporary revision in write- 1 Written off 67,274 55,866 -16.9 245,862 199,051 -19.0 off criteria by
Slide 17: Cost-to-Income Ratio
Cost-to-Income Ratio Operational efficiency (excluded IL) improved due to prudent cost management Total operating Q3 Q3 9M 9M expenses increased by (RM mil) YoY YoY FYE20 FYE21 FYE20 FYE21 RM36.2mil Total Operating Income 433.6 441.1 +1.7% 1,289.8 1,253.7 -2.8% (14.0% Q3 YoY) and Total Impairment Lo
Slide 18: Taxation: Appeal Status Update
Taxation: Appeal Status Update No Item Remark Status i. Filed a Notice of Appeal (Form Q) on 5 • The Company had filed a notice of • To date, hearing date has yet to be Jan 2018 to Special Commissioners of appeal to dispute the additional fixed. Income Tax (SCIT) assessments ii. Judicial Review – Le
Slide 19: Operational Updates
JEON yza3, ACON CREDIT SERVICE CREDIT SERVICE Operational Updates
Slide 20: COVID-19: Initiatives amid CMCO
COVID-19: Initiatives amid CMCO Priority: Employees’ Safety and Welfare To protect employees from infection risk and providing a safe working environment Covid-19 Initiatives Installation of acrylic Mass Covid-19 Swab Establishing the culture Daily normal sanitation panels to keep the Test through a
Slide 21: COVID-19: Initiatives amid CMCO (cont’d)
COVID-19: Initiatives amid CMCO (cont’d) Continuous support for our Customers Actively engaging with customers to understand their financial needs; Taking care of their safety at our branches/ service centres Financial Assistance Targeted Customer Description Offering Period Type of Financing Progra
Slide 22: Business Recovery
Business Recovery Ensure asset quality is in control while expanding new sales steadily on our recovery path towards sustainable growth Collection for new sale improved – reflecting the quality Sales increased as approval ratio recovered of new sales generated and branch marketing activities resumed
Slide 23: Digitalization
Digitalization Accelerating digitalization and enhancing customer’s touchpoint Transformation Roadmap E-Application E-KYC E-Signature E-Warehouse Data Warehouse ▪ E-Forms ▪ Launched E-KYC ▪ Reduce the need ▪ Adopting ▪ Data analysis ▪ B2C2B – direct solution on Oct for face-to-face paperless ▪ Credi
Slide 24: Digitalization (cont’d)
Digitalization (cont’d) Promoting cashless transaction and relentlessly enhancing features on AEON E-wallet to encourage adoption and for better user experience Common Platform Collaboration programme within the Group For Loyalty Point Programme Corporate employee program Paying bill with AEON point
Slide 25: Regionalisation
Regionalisation Localising marketing strategy by states to better facilitate the business expansion at potential untapped markets and customise the product offerings Streamlining operation and reviewing performance constantly for agile decision making and cost efficiency Regional telemarketing setup
Slide 26: Key Takeaways & Prospects
Key Takeaways & Prospects Amid the uncertainties surrounding COVID-19 globally and domestically, the Malaysian GDP improved with a slower contraction of 2.7% year-on-year for the third quarter of 2020 – a significant recovery from the 17.1% contraction in the second quarter of 2020. The rebound was
Slide 27: Appendices
JEON yza3, ACON CREDIT SERVICE CREDIT SERVICE Appendices
Slide 28: Performance Highlights
Performance Highlights Q3 Q1 Q2 Q3 QoQ YoY 9M 9M YoY (RM mil) FYE20 FYE21 FYE21 FYE21 (%) (%) FYE20 FYE21 % Total Transaction & 1,588.9 778.6 962.4 1,224.4 27.2% -22.9% 4,735.4 2,965.4 -37.4% Financing Volume Credit Card 461.8 331.8 394.7 376.9 -4.5% -18.4% 1,333.8 1,103.3 -17.3% Easy Payment 754.8
Slide 29: Financial Summary
Financial Summary Q3 Q1 Q2 Q3 QoQ YoY (RM mil) FYE20 FYE21 FYE21 FYE21 (%) (%) Credit Card 883.8 838.5 829.8 839.3 1.1% -5.0% Card Purchase 822.2 779.9 769.9 769.0 -0.1% -6.5% Cash Advance 61.6 58.6 59.9 70.3 17.4% 14.1% Personal Financing 2,813.5 2,875.2 2,679.8 2,639.9 -1.5% -6.2% Objective Financ
Slide 30: Operating Income
Operating Income Q3 Q1 Q2 Q3 QoQ YoY 9M 9M YoY (RM mil) FYE20 FYE21 FYE21 FYE21 (%) (%) FYE20 FYE21 (%) Credit Card 33.2 34.1 35.1 38.2 8.8% 15.1% 96.7 107.4 11.1% Personal Financing 130.5 119.3 100.7 113.6 12.8% -13.0% 385.9 333.5 -13.6% Objective Financing 20.8 19.6 19.6 16.9 -14.1% -19.1% 64.3 56
Slide 31: Total Expenses
Total Expenses Q3 Q1 Q2 Q3 QoQ YoY 9M 9M YoY (RM mil) FYE20 FYE21 FYE21 FYE21 (%) (%) FYE20 FYE21 (%) Total Impairment Loss 114.5 174.4 112.0 156.9 40.1% 37.1% 362.5 443.3 22.2% Personnel Expenses 66.3 35.9 48.1 55.4 15.1% -16.4% 185.0 139.4 -24.6% Advertisement & 17.9 12.2 12.9 12.4 -3.6% -30.6% 66
Slide 32: Financial Indicators
Financial Indicators 9M 9M (RM mil) FYE18 FYE19 FYE20 FYE20 FYE21 PBT 398.3 472.2 390.4 272.4 171.3 PAT 300.1 354.6 292.0 203.7 120.2 Weighted average no. of ordinary shares 200.3 255.3 255.3 255.3 255.3 (mil unit) Basic EPS (RM)* 1.4 1.3 1.1 0.6 0.6 NTA per share (RM) 6.4 6.0 6.1 6.0 6.0 ROE (%)* 2
Slide 33: Thank You
Head Office Mr Lee Kit Seong Level 18, UOA Corporate Tower, Chief Corporate Officer Avenue 10, The Vertical, leeks@aeoncredit.com.my Bangsar South City, 03-2772 9000 No. 8, Jalan Kerinchi, 59200 Kuala Lumpur. Ms Lee Siew Tee www.aeoncredit.com.my Chief Financial Officer stlee@aeoncredit.com.my 03-27
AEON Credit Service (M) Berhad — Q3 FYE2021 Earnings Presentation on 6ix