Aeon Credit Service (m) Bhd. · MYX:AEONCR
Aeon Credit Service (m) Bhd — Q3 FYE24 Earnings Presentation
31 slides from Aeon Credit Service (m) Bhd's earnings presentation, Dec 21, 2023
Slide 1: Q3 FYE24 Financial Results
Q3 FYE24 Financial Results 21 December 2023
Slide 2: Table of Contents
Table of Contents 03 FINANCIAL OVERVIEW 13 KEY STRATEGIES & MOVING FORWARD 24 APPENDIX
Slide 3: Financial Review
SEON FINANCIAL REVIEW “A a
Slide 4: Q3FYE24 Key Highlights (QoQ)
Q3FYE24 Key Highlights (QoQ) Revenue Impairment Loss Gross Receivables Bonus Issue RM486.5 mil RM182.8 mil RM11.9 bil 1 +1 +3.1% QoQ +51.6% QoQ +2.9% QoQ +255,307,690 new ordinary shares PROFITABILITY ASSET GROWTH AND QUALITY Capital • Revenue grew by 3.1% to RM486.5 mil • Transaction and Financing
Slide 5: Financial Performance
Financial Performance Q3FYE24 PAT +2.3% YoY; Gross Financing Receivables +12.4% YoY Q3FYE23 Q3FYE24 Q3 YoY 9M FYE23 9M FYE24 9M YoY Total Income 460.0M 535.0M 16.3% 1,356.3M 1,558.1M 14.9% Operating Expenses -136.3M -150.8M 10.6% -373.3M -438.0M 17.3% Operating Profit before 398.7M 309.3M 22.4% 983.
Slide 6: Total Transaction & Financing Volume
Total Transaction & Financing Volume Personal Financing volume increases YoY driven by higher applications and improvement in approval ratio Transaction & Volume by Types Total Transaction & Financing Volume (RM mil) 46.0% 44.9% 805 819 507 500 498 Q3 Q3 712 485 FYE23 FYE24 437 28.2% 27.8% 400 25.8%
Slide 7: Total Gross Financing Receivables
Total Gross Financing Receivables Growth YoY of 12.4% across all segments Gross Receivable by Types Gross Financing Receivables (RM mil) 66.5% 64.2% 7,510 7,646 767 3,490 7,042 739 3,317 Q3 Q3 689 2,862 FYE23 FYE24 27.0% 29.3% 6.5% 6.4% • Overall loan growth momentum continued, rising 12.4% YoY, Q3
Slide 8: Receivables Collection
Receivables Collection Maintain balanced approach of sales expansion and prudent credit management Current Collection Ratio (%) D1 & D2 Collection Ratio (%) Collection performance continues to improve QoQ: • Launching of risk-based collection strategy in 97.5 Mar 23, focusing on high-risk customers
Slide 9: Non-Performing Loan (NPL)
Non-Performing Loan (NPL) Sequential improvements from risk-based approach collection strategy NPL Trend Lower NPL QoQ due to: 2.98 • Decrease in D3+ Balance 2.54 2.73 contributed by improvement in 1.75 Easy Payment financing • Adopted AI credit scoring to improve accuracy and capture good score cus
Slide 10: Net Credit Cost (NCC)
Net Credit Cost (NCC) Continuous prudent approach on provisioning NCC Trend 4.88% 5.35% 4.31% 2.01% Higher annualised NCC: 3.23% 3.73% 2.52% • Higher credit cost contributed 0.42% by Motorcycle Financing and Objective Financing 104 75 137 • Continue monitor productivity in -9 line with the implement
Slide 11: Impairment Loss (IL) Analysis
Impairment Loss (IL) Analysis Loan Loss Coverage Ratio remains at healthy levels 410% Expected Credit Loss (ECL) provision 297% attributed by: 219% 233% • Higher QoQ from delinquent account 1 movement and lower reversal in general provision of RM37 mil and RM5 mil respectively 178 182 162 • Bad debt
Slide 12: Cost-to-Income Ratio (CIR)
Cost-to-Income Ratio (CIR) CIR expansion in line with sales and revenue growth Q3 Q3 9M 9M RM mil YoY YoY FYE23 FYE24 FYE23 FYE24 Total Operating Income 460.0 535.0 16.3% 1,356.3 1,558.1 14.9% Personnel Expenses 56.3 64.9 15.2% 152.0 181.1 19.2% Advertisement & Promotion 7.8 6.5 -16.4% 21.9 24.7 12.
Slide 13: Key Strategies and Moving Forward
KEY STRATEGIES AND MOVING FORWARD
Slide 14: FYE2024 Indicators
FYE2024 Indicators Continual delivery of sustainable returns to shareholders Indicators Actual Remark FYE24 9M FYE24 • Driven by high application count coupled with higher approval ratio, Loan Growth ±10% 12.4% attributed to strategic marketing campaigns and higher pre-assessment applications Cost-t
Slide 15: Our Mid Term Aspirations
Our Mid Term Aspirations 4 Key Pillars of focuses to drive financial inclusion and sustainable growth Support our customers Innovative Retail Company Best Employer of Choice ESG leading Company through their life cycle - Significant wallet user base - High Employee Satisfaction - Maintain high ESG s
Slide 16: Receivables Growth: Digital Onboarding
Receivables Growth 1 Driving sales and member growth via digital onboarding from application to disbursement within 1 day End-to-End Digital Onboarding ➢ Completed Personal Financing end-to-end digital onboarding in Oct 23, providing a seamless experience from application to agreement signing within
Slide 17: Receivables Growth: Must Have Card in AEON Store
Receivables Growth 2 Enrichment of Credit Card Business via rebranding and card features revision Credit Card Features Revamp ➢ Streamlined credit card features programe launched in Oct 23 to acquire AEON Shoppers through attractive rewards and privileges, Card privilege revamp making AEON credit ca
Slide 18: Receivables Growth: AI Scoring Model
Receivables Growth 3 Redefined assessment process to improve accuracy and productivity Implement AI Scoring Model ➢ Launch of Loan Origination System (“LOS”) 3.0 in Sep 23, auto judge ratio increased to 38% in Nov. We will continue focus on completion of straight through process ➢ Introduction of Ga
Slide 19: Receivables Growth: New Collection System
Receivables Growth 4 Enhanced efficiency and productivity through New Collection System Risk-Based Collection Approach ➢ Implemented collection risk-based scorecard model by categorising customers according to their scores and risk profiles for Easy Payment and Personal Financing ➢ Extension of repo
Slide 20: Enhance Customer Experience
Enhance Customer Experience One stop financing app that connects all AEON points accounts to AEON Group Membership Platform Upgraded AEON Wallet usability and improved user experience AEON Group Membership Launched New wallet Oct 22 interface designed E-donation with AEON points Jan 23 Mar 23 EPPF F
Slide 21: Employee Development
Employee Development Committed to Employee Enrichment ➢ Invested in Microsoft 365 to modernize working Employee Development AEON Group Membership platform ➢ Launch of HR mobile app and e-learning platform ➢ Invest in cloud shifting and migration for changing business needs Employee Development High
Slide 22: Sustainability Progress Update
Sustainability Progress Update Embedding Sustainability across AEON Credit business and products Sustainability Statement Shaping our future in financial services through sound, innovative and sustainable ESG practices and initiatives ESG Achievement Environmental Economy Social Governance to-date:-
Slide 23: Corporate Social Responsibilities Activities – Q3 FYE24
Corporate Social Responsibilities Activities – Q3 FYE24 Firmly committed in continually supporting communities Community Support Financial Literacy Malaysian AEON Foundation AEON Bantu Malaysian AEON Foundation Charity AEON Financial Savvy Programme with Flood Relief in Terengganu Deepavali Shopping
Slide 24: Appendix
SEON ‘CREDIT SERVICE APPENDIX a
Slide 25: Performance Highlights
Performance Highlights Q3 Q1 Q2 Q3 9M 9M (RM mil) QoQ YoY YoY FYE23 FYE24 FYE24 FYE24 FYE23 FYE24 Total Transaction & Financing 1,548.6 1,832.3 1,789.9 1,823.9 1.9% 17.8% 4,647.7 5,446.1 17.2% Volume Payment Business 437.0 482.5 485.2 507.0 4.5% 16.0% 1,326.1 1,474.7 11.2% Easy Payment Financing 711
Slide 26: Financial Summary
Financial Summary Q3 Q1 Q2 Q3 (RM mil) QoQ YoY FYE23 FYE24 FYE24 FYE24 Credit Card 689.1 719.7 738.8 766.7 3.8% 11.3% Personal Financing 2,861.6 3,126.5 3,316.7 3,490.0 5.2% 22.0% Easy Payment Financing 7,041.8 7,372.8 7,510.1 7,646.0 1.8% 8.6% Total Financing Receivables 10,592.5 11,219.0 11,565.6
Slide 27: Operating Income
Operating Income Q3 Q1 Q2 Q3 9M 9M (RM mil) QoQ YoY YoY FYE23 FYE24 FYE24 FYE24 FYE23 FYE24 Payment Business 41.9 42.8 44.3 45.5 2.8% 8.6% 120.9 132.6 9.6% Personal Financing 113.6 128.8 140.1 149.6 6.7% 31.7% 323.3 418.5 29.4% Easy Payment Financing 260.0 278.1 284.1 287.7 1.3% 10.7% 756.6 849.9 12
Slide 28: Total Expenses
Total Expenses Q3 Q1 Q2 Q3 9M 9M (RM mil) QoQ YoY YoY FYE23 FYE24 FYE24 FYE24 FYE23 FYE24 Impairment Loss on Receivables 143.4 152.5 120.6 182.8 51.6% 27.5% 330.6 456.0 37.9% Personnel Expenses 56.3 53.0 63.3 64.9 2.6% 15.2% 152.0 181.1 19.2% Advertisement & Promotion 7.8 9.7 8.6 6.5 -24.6% -16.4% 2
Slide 29: Financial Indicators
Financial Indicators Q3 9H FYE21 FYE22 FYE23 FYE24 FYE24 PBT (RM mil) 324.9 526.8 547.0 111.4 402.6 PAT (RM mil) 234.0 365.4 417.7 85.5 305.1 Weighted average no. of ordinary shares (mil) 255.3 255.3 255.3 510.6 510.6 Basic EPS (RM)*/** 0.88 1.39 1.60 0.78 0.78 NTA per share (RM)** 6.6 7.8 9.1 4.9 4
Slide 30: 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 31: 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, Bangsar South City, 03-2772 9000
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