Aeon Credit Service (m) Bhd. · MYX:AEONCR
Aeon Credit Service (m) Bhd — Q2 FYE20 Earnings Presentation
28 slides from Aeon Credit Service (m) Bhd's earnings presentation, Sep 26, 2019
Slide 1: Q2 / 1H FYE20 Results Update
Listing Board Bursa Malaysia Securities Berhad, Main Market Stock Name/ Code AEONCR/ 5139 Q2 / 1H FYE20 Results Update 26 Sept 2019 1
Slide 2: Forward-looking Statements
Forward-looking Statements 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 warr
Slide 3: Table of Content
Table of Content Financial Overview Key Strategic Focus Slide no. 4 Slide no. 17 New accounting standard – MFRS 9 (Expected Credit Loss Model) MFRS 9 replaces MFRS 139 and revises the accounting guidance for classification and measurement of financial assets, impairment and hedge accounting. AEON Cr
Slide 4: Financial Overview
JEON Financial Overview
Slide 5: Financial Snapshot: 1H FYE20
Financial Snapshot :1H FYE20 1H 1H YoY FYE19 FYE20 Change PAT RM180M RM134M -25.6% PAT (prior to IL provision) RM332M RM382M +15.1% Profitability ROE* 23.3% 18.9% -4.4% ROE* (prior to IL provision) 33.5% 35.3% +1.8% Transaction & Financing Volume RM2.3B RM3.1B +34.8% Gross Financing Receivables RM7.
Slide 6: Income Statement
Income Statement Uptrend Revenue moved in tandem with positive sales growth Total Transaction & Financing Volume Revenue (RM mil) (RM mil) 1,584 1,562 378.6 404.4 1,270 332.1 -1.4% QoQ +6.8% QoQ +23.0% YoY +21.8% YoY Q2 Q1 Q2 Q2 Q1 Q2 FYE19 FYE20 FYE20 FYE19 FYE20 FYE20 PBT PAT (RM mil) (RM mil) 140
Slide 7: Balance Sheet
Balance Sheet Supporting by healthy financing receivables growth Gross Financing Receivables ROA* (RM mil) (%) 4.6 9,597 3.8 9,144 3.3 7,855 +5.0% QoQ -0.5% QoQ +22.2% YoY -1.3% YoY Q2 Q1 Q2 Q2 Q1 Q2 FYE19 FYE20 FYE20 FYE19 FYE20 FYE20 ROE* CAR 30.0 (%) 22.0 (RM mil) 25.0 23.3 22.1 21.7 18.9 20.0 20
Slide 8: Total Transaction & Financing Volume
Total Transaction & Financing Volume Mainly contributed by Vehicle Financing Volume (RM mil) Q2 Q1 Q2 QoQ YoY FYE19 FYE20 FYE20 Products (%) (%) 4 14 4 18 76 86 Credit card +3.0 +28.1 235 224 7 Personal Financing -5.8 +13.3 79 Motorcycle Financing -3.5 +28.8 187 427 412 Auto Financing -4.7 +19.8 320
Slide 9: Total Financing Receivables
Total Financing Receivables Continuous growth under the challenging environment Gross Receivables (RM mil) QoQ YoY Receivables Movement (%) (%) Q2 Q1 Q2 FYE19 FYE20 FYE20 Credit card +5.2 +25.2 Personal Financing +5.4 +31.6 60 63 348 Motorcycle Financing +5.9 +27.4 340 Auto Financing +4.0 +15.0 64 O
Slide 10: Receivables Collection
Receivables Collection Healthy portfolio with stable collection results Receivables Collection Trend 100.00 97.29 97.38 97.85 97.97 98.14 97.90 90.00 80.98 83.39 82.58 82.80 81.06 81.07 80.00 70.34 71.66 71.24 72.93 70.28 70.00 68.52 60.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FYE17 FYE18 FYE19
Slide 11: Status of Finance Receivables
Status of Finance Receivables Breakdown of financing receivables Delinquent Ratio Pace of increase in outstanding financing receivables accelerated in 1HY FYE20 1,000 -> Increase of 35% YoY 800 The collection rate improved in 1HY FYE19 600 due to government support to the lower income group Increase
Slide 12: Impairment Loss Analysis
Impairment Loss Analysis +69.4mil impairment (LY:-14.7mil) from higher receivables as early recognition is required under MFRS9; and lower collection due to Hari Raya festival season FYE 2019 FYE 2020 1HY FYE19 vs 1Q 2Q 1HY 1Q 2Q 1HY RM'000 1HY FYE20 RM'000 % [A] Written Off 84,935 82,109 167,044 88
Slide 13: Net Credit Cost
Net Credit Cost In line with higher receivables growth, and past festival season more IL provisions (MFRS 9) is required Net Credit Cost (NCC) Trend 150 4.04 5 3.73 3.56 130 3.32 3.31 3.28 3.43 3.43 3.27 2.99 4 2.19 2.08 2.16 110 3 90 1.70* 2 70 1 50 0 30 10 47 61 51 42 55 62 61 50 32 52 39 52 67 11
Slide 14: Non-Performing Loans
Non-Performing Loans Continuous prudent approach on asset quality strategy 12,000 Non-Performing Loans (NPL) Trend 4.00 2.74 10,000 2.43 2.33 2.28 2.43 2.48 2.48 2.33 2.26 1.92 2.00 3.00 2.07 2.05 2.04 2.00 8,000 1.00 6,000 0.00 4,000 -1.00 2,000 -2.00 5,825 6,069 6,362 6,591 6,832 7,046 7,203 7,319
Slide 15: Dividend
Dividend Consistent dividend payout with confident in business prospect 1H 1H 1H FYE18 FYE19 FYE20 Interim Single Tier 22.25 21.13 sen/ share 22.25 sen/ share Dividend sen/ share Dividend Payout RM52.25mil RM55.78mil RM55.82mil Dividend Payout 35.5% 31.0% 41.7% Ratio 15
Slide 16: 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 17: Key Strategic Focus
JEON Key Strategic Focus
Slide 18: Key Strategic Focus: Asset Quality Management
Key Strategic Focus Asset Quality Management Targeted product offerings to cater for demand from different income groups Settlement Business Auto Financing Objective Financing Platinum Credit Card New Car Premium Bicycle + 321% + 114% + 111% YoY Total Transaction Amount YoY Sales Amount YoY Sales Am
Slide 19: Key Strategic Focus: Database Integration
Key Strategic Focus Database Integration Optimise the potential of data for targeted offerings & cross selling Data Analytics Platinum Credit Card 6 million SME AEON Super Bike members Premium Bicycle Wellness Products & its product focus Income range 0.93 mil Gold Credit Card converted become Perso
Slide 20: Key Strategic Focus: Technology Advancement
Key Strategic Focus Technology Advancement To improve user experiences & the efficiency of business process & support system AI Artificial Intelligence Core System Upgrading RPA E-KYC Robotic Process Automation (e-Know Your Customer) Biometric Identification 20
Slide 21: Key Takeaways & Prospects
Key Takeaways & Prospects Factoring out the book value impact of the MFRS 9 adoption, core business remains positive as per management’s expectation. Key ratios are within healthy range Management is working on strategies to address the implication of MFRS 9 by enhancing cost efficiency, including s
Slide 22: Appendices
JEON Appendices
Slide 23: Performance Highlights
Performance Highlights Q2 Q1 Q2 QoQ YoY 1H 1H YoY (RM’000) FYE19 FYE20 FYE20 (%) (%) FYE19 FYE20 % Total Transaction & 1,270.4 1,584.1 1,562.5 -1.4 23.0 2,347.4 3,146.6 34.1 Financing Volume Credit Card 345.0 429.2 442.8 3.2 28.4 663.1 872.0 31.5 Easy Payment 592.6 741.9 724.8 -2.3 22.3 1,137.2 1,46
Slide 24: Financial Summary
Financial Summary Q2 Q1 Q2 QoQ YoY (RM’000) FYE19 FYE20 FYE20 (%) (%) Credit Card 664 790 831 5.2 25.2 Card Purchase 598 727 769 5.8 28.6 Cash Advance 66 63 62 -1.6 -6.1 Personal Financing 2,013 2,513 2,649 5.4 31.6 Objective Financing 400 340 348 2.4 -13.0 Motorcycle Financing 2,319 2,789 2,954 5.9
Slide 25: Operating Income
Operating Income Q2 Q1 Q2 QoQ YoY 1H 1H YoY (RM’000) FYE19 FYE20 FYE20 (%) (%) FYE19 FYE20 % Credit Card 29 32 32 - 10.3 57 63 10.5 Personal Financing 98 121 134 10.7 36.7 190 255 34.2 Objective Financing 26 22 22 - -15.4 53 43 -18.9 Motorcycle Financing 103 121 130 7.4 26.2 206 252 22.3 Auto Financ
Slide 26: Total Expenses
Total Expenses Investment on AEON Group database integration resulted higher A&P Q2 Q1 Q2 QoQ YoY (RM mil) FYE19 FYE20 FYE20 (%) (%) Impairment Loss on Receivables 95.2 93.3 154.7 65.8 62.5 Personnel Expenses 58.6 55.1 63.6 15.4 8.5 Advertisement & Promotion (A&P) 12.7 24.0 25.1 4.6 97.6 Other Opera
Slide 27: Financial Indicators
Financial Indicators Q2 Q2 1H 1H (RM’000) FYE17 FYE18 FYE19 YoY YoY FYE19 FYE20 FYE19 FYE20 PBT 351.0 398.0 472.0 107.2 66.9 -37.6 239.0 179.5 -24.9 PAT 265.0 300.0 355.0 80.6 49.1 -39.1 179.9 133.7 -25.7 Weighted average no. of ordinary shares 248.0 206.0 255.0 255.0 255.0 - 255.0 255.0 - (mil unit
Slide 28: Thank You
Head Office Investor Relations Contact Level 18, UOA Corporate Tower, Mr Lee Kit Seong Avenue 10, The Vertical, Chief Financial Officer Bangsar South City, leeks@aeoncredit.com.my No. 8, Jalan Kerinchi, 03-2772 9000 59200 Kuala Lumpur. Mr Chen Heng Guan Website : www.aeoncredit.com.my Head of Corpor
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