Aeon Credit Service (m) Bhd. · MYX:AEONCR
Aeon Credit Service (m) Bhd — Q4 FYE19 Earnings Presentation
33 slides from Aeon Credit Service (m) Bhd's earnings presentation, Apr 25, 2019
Slide 1: Q4/12M FYE19 Results Update
Listing Board Bursa Malaysia Securities Berhad, Main Market Stock Name/ Code AEONCR/ 5139 Q4/12M FYE19 Results Update 25 April 2019
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: Financial Overview
JEON Financial Overview
Slide 4: Key Highlights
Key Highlights “ FYE19 results reflected the effectiveness of our initiatives put forward. We will continue ” to create value by focusing on quality, digitalisation and efficiency. Q4 FYE19 Total Transaction & Revenue PAT Financing Volume +48.9% YoY +16.3% YoY +6.4% YoY 12M FYE19 Total Transaction &
Slide 5: Income Statement – Quarterly
Income Statement – Quarterly 6.4% PAT grew YoY from higher transaction volume and receivables growth Total Transaction & Financing Volume Revenue (RM mil) (RM mil) 1,488.1 359.5 1,448.7 348.5 973.1 -2.6% QoQ 309.2 +3.2% QoQ +48.9% YoY +16.3% YoY Q4 Q3 Q4 Q4 Q3 Q4 FYE18 FYE19 FYE19 FYE18 FYE19 FYE19
Slide 6: Income Statement – Yearly
Income Statement – Yearly Steady YoY growth in top-line and bottom-line Total Transaction & Financing Volume Revenue (RM mil) (RM mil) 5,335.7 1,365.8 1,235.1 1,102.0 4,014.7 4,047.6 +31.8% +10.6% +0.8% +12.1% FYE17 FYE18 FYE19 FYE17 FYE18 FYE19 PBT PAT (RM mil) (RM mil) 500 472.2 354.6 450 398.3 30
Slide 7: Balance Sheet – Yearly
Balance Sheet – Yearly Healthy with greater financing receivables growth YoY Gross Financing Receivables ROA ROE (RM mil) (%) (%) 8.0 28.9 8,692.4 7.0 7,319.1 -6.3% 22.6 22.1 6,591.0 +18.8% 6.0 +0.3% -0.5% 5.0 4.3 +11.0% 4.0 4.0 4.0 3.0 2.0 1.0 0.0 FYE17 FYE18 FYE19 FYE17 FYE18 FYE19 FYE17 FYE18 FYE
Slide 8: Segmental Breakdown: Total Transaction & Financing Volume
Segmental Breakdown: Total Transaction & Financing Volume Personal Financing and Motorcycle Financing driven volume growth Volume (RM mil) Q4 Q4 YoY 12M 12M YoY Products 1,600 FYE18 FYE19 % 6,000 FYE18 FYE19 % 12 +166.7 15 +11.1 1,400 8 30 Credit card 184 +23.5 +18.8 721 5,000 1,200 Personal Financi
Slide 9: Segmental Breakdown: Total Financing Receivables
Segmental Breakdown: Total Financing Receivables 18.8% growth YoY mainly from Credit Card, Personal & Motorcycle Financing Receivables – Changes (%) QoQ YoY Gross Receivables (RM mil) Credit card +8.6 +19.1 Q4 Q1 Q2 Q3 Q4 Personal Financing +5.2 +26.6 10,000 FYE18 FYE19 Objective Financing -6.1 -16.
Slide 10: Receivables Collection
Receivables Collection Stable collection ratio Derived from better quality receivables & strategic collection operation Receivables Collection Trend 100.00 97.40 97.62 97.97 90.00 81.73 83.13 82.58 80.00 72.24 71.24 70.00 69.32 60.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FYE17 FYE18 FYE19 Current Coll
Slide 11: Net Credit Cost
Net Credit Cost Well-managed credit cost By better quality receivables and higher bad debt recovery Net Credit Cost (NCC) Trend 90 3.32 3.73 3.56 3.31 3.28 3.43 3.43 3.27 4 80 70 1.70 2.19 2.08 2.16 3 60 2 50 1 40 30 0 47 61 51 42 55 62 61 50 32 52 39 52 20 -1 10 0 -2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 12: Non-Performing Loans
Non-Performing Loans Achieved lower NPL due to delinquent receivables collection improvement Non-performing Loans (NPL) Trend 12,000 4 2.74 10,000 2.43 2.33 2.28 2.43 2.48 2.48 2.33 2.26 3 2.07 2.05 2.04 2 8,000 1 6,000 0 4,000 -1 2,000 -2 5,825 6,069 6,362 6,591 6,832 7,046 7,203 7,319 7,508 7,855
Slide 13: MFRS 9: Credit Cost Management
MFRS 9: Credit Cost Management Manage each element to improve credit cost MFRS 139 (previously used model) : Incurred Loss Model Outstanding Default (RM) Rate (%) MFRS 9 : Expected Credit Loss Model Outstanding EAD (%) PD (%) LGD (%) (RM) Exposure Probability Loss Given at Default of Default Default
Slide 14: MFRS 9: Credit Cost Management
MFRS 9: Credit Cost Management New Sales Collection Ratio Credit Card Hire Purchase Personal Financing 99.00% 99.00% 99.60% 98.50% 98.50% 99.50% 98.00% 98.00% 99.40% 97.50% 99.30% 97.50% 99.20% 97.00% 97.00% 99.10% 96.50% 96.50% 99.00% 96.00% 98.90% 96.00% 95.50% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 15: Taxation: Appeal Status Update
Taxation: Appeal Status Update No Item Remark Status i. Filed a Notice of Appeal (Form Q) • The Company had filed a notice • Todate, hearing date has yet to on 5 Jan 2018 to Special of appeal to dispute the be fixed. Commissioners of Income Tax additional assessments (SCIT) ii. Judicial Review – Lea
Slide 16: Dividend
Dividend Consistent dividend commitment FYE16 FYE17 FYE18 FYE19 Dividend RM RM RM RM Interim dividend (cent) 29.85 30.50 21.13 22.25 Payout amount (RM’000) 42,984 43,920 52,225 55,784 Final dividend (cent)* 29.60 32.50 20.00 22.35 Payout amount (RM’000)* 42,624 46,800 49,937 56,063 Total dividend (c
Slide 17: Key Policy Overview
JEON Key Policy Overview
Slide 18: Key Policy: FYE19 vs FYE20
Key Policy: FYE19 vs FYE20 FYE19 FYE20 Continue M40 customer Asset Quality Customer segment expansion expansion AEON customer integration AEON Ecosystem AEON Customer integration Ecosystem E-wallet and E-money Strengthening transaction introduction settlement functions Diversification
Slide 19: Customer: Asset Quality
Customer: Asset Quality Continue M40 customer expansion To achieve better asset quality via customised offerings E.g.: platinum card and risk-based pricing products (launched in FYE19) 【Customer Income Group Ratio】 B40 M40 FYE18 FYE19 FYE20 19
Slide 20: Customer: AEON Ecosystem
Customer: AEON Ecosystem (Cont’d) AEON ecosystem integration To tap into the existing 6 million AEON Group members & integrating across AEON business alliances FYE2020 Key Action 1. AEON Loyalty Point program for tenants with AEON group 2. Expand external privilege merchant e.g. E-commerce, F&B etc
Slide 21: Product: Diversification
Product: Diversification Strengthening transaction settlement functions AEON E-wallet + Member Plus Visa Card To create a common platform for all AEON members and the cashless solution has been implemented at all AEON retail outlets nationwide (launched in FYE19) 1 for ALL FYE2020 E-Money & E-Wallet
Slide 22: Product: Diversification (Cont'd)
Product: Diversification (Cont’d) Develop new product scheme to meet a variety of customers needs Objective Financing From Consumer Durable Products to other purposes, e.g.: healthcare, wedding, renovation, etc. SME Financing Existing Money lending licence Equipment hire purchase Working capital Cro
Slide 23: Business Model: Continue Customer Contact Improvement
Business Model: Continue Customer Contact Improvement 2-Way customer touchpoints Multiple channels to capture more customers B2B2C Financing Merchants Customers B2C2B Financing Customers Merchants New system and mobile app are developing for B2C2B feature. It will enable direct dealing with customer
Slide 24: Operation: Productivity & Efficiency Improvement
Operation: Productivity & Efficiency Improvement To improve efficiency and productivity through Artificial Intelligence (AI) data analytics, robotic process automation (RPA) and mobile application Shortening the whole Flattening the peak operating Promoting paperless process turnaround time ho
Slide 25: Appendices
JEON Appendices
Slide 26: Share Price Trend (FYE19)
Share Price Trend (FYE19) Outperform the FBMKLCI by 32.36% AEONCR: 24.36% FBMKLCI: -8.00% Sector Financial Services Market Capital RM4.15 bil (as at 28 Feb 19) Share Price RM16.54 (as at 28 Feb 19) FYE Feb 19 52-Week High/ Low RM17.14 / RM12.12 Irredeemable Convertible 432,000,000 units Balance of U
Slide 27: Performance Highlights Yearly
Performance Highlights Yearly YoY (RM’000) FYE16 FYE17 FYE18 FYE19 (%) Total Transaction & Financing 3,615,989 4,014,688 4,047,611 5,335,718 31.8 Volume Total Income 1,055,208 1,222,192 1,361,606 1,519,550 11.6 Operating Expenses (590,387) (670,983) (735,960) (794,479) 8.0 Finance Cost (163,230) (20
Slide 28: Performance Highlights Quarterly
Performance Highlights Quarterly Q4 Q3 Q4 QoQ YoY (RM’000) FYE18 FYE19 FYE19 (%) (%) Total Transaction & Financing 973,094 1,488,116 1,448,714 (2.6) 48.9 Volume -Credit Card 344,833 410,949 464,408 13.0 34.7 -Easy Payment Financing 444,942 620,431 627,953 1.2 41.1 -Personal Financing 183,310 453,427
Slide 29: Operating Income
Operating Income Q4 Q3 Q4 QoQ YoY FYE FYE YoY (RM’000) FYE18 FYE19 FYE19 (%) (%) 18 19 (%) Credit Card 29,917 30,392 31,817 4.7 6.4 115,400 119,267 3.4 Personal Financing 83,580 108,848 114,596 5.3 37.1 333,687 413,073 23.8 Objective Financing 28,009 24,298 22,482 (7.5) (19.7) 118,736 100,219 (15.6)
Slide 30: Expenses
Expenses Q4 Q3 Q4 QoQ YoY FYE FYE YoY (RM mil) FYE18 FYE19 FYE19 (%) (%) 18 19 (%) - Impairment Loss on 82.2 61.5 94.5 53.7 15.0 336.0 308.4 (8.2) Receivables - Personnel Expenses 49.0 62.7 54.2 (13.6) 10.6 199.0 224.0 12.6 - Other Operating Expenses 53.6 69.7 75.2 7.9 40.3 201.0 262.1 30.4 Operatin
Slide 31: Financial Summary Quarterly
Financial Summary Quarterly (RM’000) Q4FYE18 Q3FYE19 Q4FYE19 QoQ (%) YoY (%) Credit Card 639,890 701,654 761,591 8.6 19.0 -Card Purchase 572,583 636,963 697,899 9.6 21.9 -Cash Advance 67,307 64,691 63,692 (1.5) (5.4) Personal Financing 1,933,725 2,329,273 2,448,723 5.1 26.6 Objective Financing 404,0
Slide 32: Financial Indicators
Financial Indicators (RM mil) FYE16 FYE17 FYE18 FYE19 YoY Q4FYE18 Q4FYE19 YoY PBT 301.59 351.16 398.34 472.19 +73.85 105.37 115.12 +9.75 PAT 228.22 265.03 300.06 354.62 +54.56 82.31 87.61 +5.30 Weighted average no. of 144.00 248.45 205.72 255.31 +49.59 205.72 255.31 +49.59 ordinary shares (mil unit)
Slide 33: 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 Yuya Narita Website : www.aeoncredit.com.my Head of Investor
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