Aeon Credit Service (m) Bhd. · MYX:AEONCR
Aeon Credit Service (m) Bhd — Q3 FYE23 Earnings Presentation
28 slides from Aeon Credit Service (m) Bhd's earnings presentation, Dec 21, 2022
Slide 1: Q3 FYE23 Financial Results
Q3 FYE23 Financial Results 21 December 2022
Slide 2: Disclaimer
Disclaimer This document has been prepared by AEON Credit Service (M) Berhad (“AEON Credit” or the “Group”) solely for the use at the presentation to analyst, fund managers and investors. The information contained in this document has not been independently verified. No representation or warranty, w
Slide 3: Table of Contents
TABLE OF CONTENTS FINANCIAL OVERVIEW 04 KEY STRATEGIES AND 15 OPERATIONAL UPDATES APPENDIX 22
Slide 4: Financial Overview
yzoy) ALCON CREDIT SERVICE FINANCIAL OVERVIEW
Slide 5: Financial Performance
Financial Performance Robust sales growth boosted by domestic demand and marketing strategies 9M FYE22 9M FYE23 YoY Revenue RM1,161.9M RM1,207.6M +3.9% Profitability PAT RM342.0M RM322.3M -5.8% ROE 24.5% 19.7% -4.8% Transaction & Financing Volume RM3.3B RM4.6B +40.6% Gross Financing Receivables RM9.
Slide 6: Income Statement
Income Statement Profit grew underpinned by loan growth and prudent cost control Total Transaction & Financing Volume (RM mil) Revenue (RM mil) 30.3% YoY 4.0% QoQ 11.0% YoY 4.7% QoQ 1,612.4 QoQ sales was Increased QoQ 1,700.000 1,486.7 1,548.6 impacted by mainly 700.0 1,500.000 1,188.3 tightening of
Slide 7: Shareholder Value & Capital Management
Shareholder Value & Capital Management Financing receivables growth momentum continued in Q3FYE23 Gross Receivables (RM mil) Return On Asset (%) 10.3% YoY 2.0% QoQ 0.4% YoY 0.6% QoQ Continued loan ROA decreased 10,592.5 10,381.0 growth by 0.6% QoQ 9,996.5 momentum driven by strong 9,605.3 6.4 market
Slide 8: Total Transaction & Financing Volume
Total Transaction & Financing Volume Overall volume improved QoQ except Vehicle Financing Group 31.8% 24.4% 25.5% 16.7% 25.4% 25.8% 10.6% 31.3% 10.9% 29.1% 10.9% 27.6% Q3 Q2 Q3 8.0% 7.4% FYE22 FYE23 5.5% FYE23 3.7% 2.5% 2.7% 0.1% 0.1% Q3 Q2 Q3 • Decline in Vehicle Volume (RM mil) QoQ YoY Financing G
Slide 9: Total Gross Financing Receivables
Total Gross Financing Receivables Healthy financing receivables growth in Q3FYE23 28.2% 27.0% 26.5% 25.2% 26.5% 27.0% 35.3% 35.9% 35.5% Q3 Q2 Q3 7.5% 6.5% 6.5% FYE22 3.6% FYE23 4.0% FYE23 4.4% 0.2% 0.1% 0.1% Q3 Q2 Q3 Increased QoQ to RM10.6 bil Volume (RM mil) QoQ YoY FYE22 FYE23 FYE23 • End-to-end
Slide 10: Receivables Collection
Receivables Collection Performance in collections and recovery on the right track Receivables Collection Trend 96.6 98.5 97.7 97.3 97.5 85.6 82.4 81.0 79.1 71.2 78.4 72.1 68.9 69.2 59.6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FYE21 FYE22 FYE23 Current Collection Ratio - Not Past Due (%) D1 Collection Ratio
Slide 11: Non-Performing Loan (NPL)
Non-Performing Loan (NPL) Prudent risk and portfolio management NPL Trend NPL Trend 2.88 2.91 2.54 Lower NPL QoQ due to : 1.75 • Improved collection productivity and growth of receivables • Reinstatement of write off criteria from D9 to D7 unpaid accounts (Normalisation) 10,222 9,605 10,381 10,592 Q
Slide 12: Net Credit Cost (NCC)
Net Credit Cost (NCC) Continuous prudent approach on provisioning NCC Trend 5.73% 4.31% Higher annualised NCC attributed 3.70% to : 4.65% 2.01% • Better delinquent account 2.52% movement net off with lower 1.75% bad debt recoveries 0.42% • Higher year to date receivables movement of RM735 mill 123 1
Slide 13: Impairment Loss (IL) Analysis
Impairment Loss (IL) Analysis Lower IL QoQ driven by change in ECL % and collection efforts 410% 318% 297% Net reversal of Expected Credit 276% Loss (ECL) provision attributed by: • Reversal of current delinquent account movement of RM40.0 121 mil net off with new sales and 101 existing delinquent I
Slide 14: Cost-to-Income Ratio (CIR)
Cost-to-Income Ratio (CIR) Operational efficiency (excluding IL) improved YoY due to prudent cost management Q3 Q3 9M 9M RM mil YoY YoY FYE22 FYE23 FYE22 FYE23 Total Operating Income 426.9 460.0 7.8% 1,300.1 1,356.3 4.3% Personnel Expenses 53.3 56.3 5.7% 162.9 152.0 -6.7% Advertisement & Promotion 1
Slide 15: Key Strategies and Operational Updates
KEY STRATEGIES and OPERATIONAL UPDATES
Slide 16: FYE2023 Indicator
FYE2023 Indicator Indicators Actual Remark FYE2023 9MFYE23 • Driven by strong demand in tandem with the growth in Loan Growth > 10% 10.3% economies post pandemic Cost-to-Income < 60% 51.9% • Prudent & discipline cost management Dividend Payout Ratio > 30% of PAT *30.5% • Paid interim dividend of 28.
Slide 17: Key Strategies Updates For 2022
Key Strategies Updates For 2022 Highlights as at 30 November 2022 Digitalization Member Expansion Customer First philosophy AEON E-Wallet App AEON Credit Card 1.58 million 0.20 million app installed as at Nov’22 card holder as at Nov’22 QRPay Payment Business Net Promoter Score (NPS) Q2FYE23 Q3FYE23
Slide 18: Key Strategies Updates For 2022 (Con't)
Key Strategies Updates For 2022 (Con’t) Phase 1 EP Digital On-Boarding with Instant Conditional Approval Process live in Sept’22 15 minutes end to end application vs. 1 to 2 days processing time up to Digital Pre-Assessment Process Reduction in Contact verification with EKYC processing time Wa
Slide 19: Key Strategies Updates For 2022 (Con't)
Key Strategies Updates For 2022 (Con’t) Highlights as at 30 November 2022 Sustainability – Linked Loan (SLL) Awards AEON Credit has secured Sustainability-linked Loan: RM500 mil Qualified external auditors engaged to verify Sustainability Performance Targets (SPTs) The SPTs cover the areas of
Slide 20: Digital Bank Timeline for FYE2022-2023
DIGITAL BANK TIMELINE FOR FYE2022-2023 Launch within 24 months from April 2022 Milestone 1 Milestone 2 Target Obtained Appointment Milestone 4 Digital Bank of Digital Bank Commence Pilot licence on CEO Operations in 29 April Project Preparation CY 4Q Project Kick-off Q1 FYE23 Q2 FYE23 Q3 FYE23 Q4 FY
Slide 21: Corporate Social Responsibility – Q3 FYE23
Corporate Social Responsibility – Q3 FYE23 Corporate social responsibility activities with local community Malaysia AEON Foundation Mesra Malaysia AEON Foundation AEON General Donation to Pusat Jagaan Warga Deepavali Donation at 6 Locations Bersamamu Programme Istimewa Kempas, Johor Blood Donation D
Slide 22: Appendix
yzoy) ALCON CREDIT SERVICE APPENDIX
Slide 23: Performance Highlights
Performance Highlights Q3 Q1 Q2 Q3 9M 9M (RM mil) QoQ YoY YoY FYE22 FYE23 FYE23 FYE23 FYE22 FYE23 Total Transaction & Financing 1,188.3 1,486.7 1,612.4 1,548.6 -4.0% 30.3% 3,305.2 4,647.7 40.6% Volume Credit Card 378.4 410.0 394.3 394.8 0.1% 4.3% 1,058.3 1,199.1 13.3% Easy Payment Financing 567.6 73
Slide 24: Financial Summary
Financial Summary Q3 Q1 Q2 Q3 (RM mil) QoQ YoY FYE22 FYE23 FYE23 FYE23 Credit Card 720.0 676.1 675.1 689.1 2.1% -4.3% Card Purchase 701.2 656.9 652.6 664.3 1.8% -5.3% Cash Advance 18.8 19.2 22.5 24.8 10.2% 32.2% Personal Financing 2,419.8 2,604.7 2,745.9 2,861.6 4.2% 18.3% Objective Financing 342.2
Slide 25: Operating Income
Operating Income Q3 Q1 Q2 Q3 9M 9M (RM mil) QoQ YoY YoY FYE22 FYE23 FYE23 FYE23 FYE22 FYE23 Credit Card 34.1 35.3 36.2 38.2 5.6% 12.0% 98.6 109.9 11.4% Personal Financing 99.8 102.8 106.9 113.6 6.3% 13.9% 317.3 323.3 1.9% Objective Financing 18.7 21.7 22.3 24.7 11.2% 32.5% 54.3 68.7 26.5% Motorcycle
Slide 26: Total Expenses
Total Expenses Q3 Q1 Q2 Q3 9M 9M (RM mil) QoQ YoY YoY FYE22 FYE23 FYE23 FYE23 FYE22 FYE23 Impairment Loss on 33.1 37.3 150.0 143.3 -4.4% 333.3% 148.6 330.6 122.5% Receivables Personnel Expenses 53.3 43.1 52.5 56.3 7.3% 5.7% 162.9 152.0 -6.7% Advertisement & Promotion 15.3 8.3 5.8 7.8 33.1% -49.3% 36
Slide 27: Financial Indicators
Financial Indicators Q1 Q2 Q3 9M FYE20 FYE21 FYE22 FYE23 FYE23 FYE23 FYE23 PBT (RM mil) 390.4 324.9 526.8 215.5 100.0 101.6 417.2 PAT (RM mil) 292.0 234.0 365.4 163.1 75.6 83.6 322.3 Weighted average no. of ordinary shares 255.3 255.3 255.3 255.3 255.3 255.3 255.3 (mil) Basic EPS (RM)* 1.07 0.88 1.3
Slide 28: Thank You
THANK YOU Mr Lee Kit Seong Ms Lee Siew Tee Investor Relations Team Chief Corporate Officer Chief Financial Officer ir_info@aeoncredit.com.my leeks@aeoncredit.com.my stlee@aeoncredit.com.my Level 18, UOA Corporate Tower, www.aeoncredit.com.my Avenue 10, The Vertical, 03-2772 9000 Bangsar South City,
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