Aeon Credit Service (m) Bhd. · MYX:AEONCR

Aeon Credit Service (m) Bhd — Q4 FYE2023 Earnings Presentation

36 slides from Aeon Credit Service (m) Bhd's earnings presentation, Apr 11, 2023

  1. Slide 1: Q4 FYE23 Financial Results

    Q4 FYE23 Financial Results 11 April 2023

  2. 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

  3. Slide 3: Table of Contents

    REVIEW OF FYE2023 4 TABLE OF FINANCIAL OVERVIEW 10 CONTENTS BUSINESS & OPERATIONAL 23 STRATEGIES APPENDICES 30

  4. Slide 4: Review of FYE2023

    yzoy) ALCON CREDIT SERVICE CCREDIT SERVICE REVIEW OF FYE2023

  5. Slide 5: Overview of Key Business Groups in FYE23

    Overview of Key Business Groups in FYE23 Improving performance despite challenging landscape Transaction & Financing Volume Transaction & Financing Volume Transaction & Financing Volume RM2.50 BIL RM1.81 BIL RM1.94 BIL +39% vs. FYE22 +10% vs. FYE22 +44% vs. FYE22 Vehicle Financing Payment Business P

  6. Slide 6: Achievements in FYE2023

    Achievements in FYE2023 Digitalisation to meet Customer Needs AEON Wallet Revamp Pre-Assessment AEON E-Wallet App 1.63 million +25% vs. FYE22 new registration UI/UX Enhancement of AEON Wallet Easy Payment Digital On-Boarding  Upgraded AEON Wallet usability and enabled  Instant Conditional Approval

  7. Slide 7: Achievements in FYE2023 (Cont'd)

    Achievements in FYE2023 (Cont’d) Sustainability progress Employees engagement Sustainability Formulation of 3 years sustainability Sustainability – Linked roadmap Loan (SLL)  Identified 6 sustainability focus areas  Secured total RM600 mil  Formulated : from CIMB, MUFG and o Sustainability Statem

  8. Slide 8: FYE2023 Review

    FYE2023 Review Indicators Actual Remark FYE23 FYE23  Marginally lower mainly impacted by supply disruption and credit portfolio tightening for Vehicle Financing, mitigated by merchant incentive program Loan Growth > 10% 9.9%  Low application count for Personal Financing in first half year impacted

  9. Slide 9: Dividend

    Dividend Consistently payout >30% of PAT to our valued shareholders Historical Dividend Data 31.5% 31.5% 31.9% 33.9% 30.3% 500.0 400.0 300.0 200.0 100.0 111.9 354.6 91.9 292.0 74.6 234.0 123.8 365.4 126.4 417.7 - 5.5% FYE19 FYE20 FYE21 FYE22 FYE23 Payout Amount (RM mil) PAT (RM mil) Payout Ratio (%)

  10. Slide 10: Financial Overview

    yzoy) ALCON CREDIT SERVICE FINANCIAL OVERVIEW

  11. Slide 11: Financial Performance

    Financial Performance Commendable Earnings growth backed by strong asset fundamental FYE21 FYE22 FYE23 YoY Revenue RM1,561.7M RM1,524.9M RM1,640.2M +7.6% PBT RM324.9M RM526.8M RM547.0M +3.8% Profitability PAT RM234.0M RM365.4M RM417.7M +14.3% ROE 13.8% 19.2% 18.8% -0.4% Transaction & Financing Volum

  12. Slide 12: Income Statement – Q4FYE23

    Income Statement – Q4FYE23 Healthy growth trajectory across all fronts Total Transaction & Financing Volume (RM mil) Revenue (RM mil) 9.3% YoY 3.3% QoQ 19.2% YoY 3.5% QoQ QoQ sales driven Increased QoQ 1,548.6 1,599.3 by Payment contributed by 1,700.000 1,500.000 1,463.4 600.0 Business Group 500.0 4

  13. Slide 13: Shareholder Value & Capital Management

    Shareholder Value & Capital Management Strong capital base supported by solid fundamentals with ample headroom for growth Gross Receivables (RM mil) Return On Asset (%) 9.9% YoY 2.3% QoQ 0.3% YoY 0.2% QoQ Continued loan ROA improved by 10,835.8 10,592.5 growth 0.3% YoY momentum driven 9,857.4 by var

  14. Slide 14: Total Transaction & Financing Volume – FYE23

    Total Transaction & Financing Volume – FYE23 Registered growth across all key segments 34.9% 30.6% 26.1% 21.1% 24.2% 13.4% 33.3% 10.2% 11.8% 9.7% 27.2% 28.1% FYE21 5.1% FYE22 6.9% FYE23 6.8% 3.5% 3.9% 2.9% 0.1% 0.1% 0.1%  Financing volume increased by 39.9% Volume (RM mil) FYE21 FYE22 FYE23 YoY des

  15. Slide 15: Revenue – FYE23

    Revenue – FYE23 All key segments registered growth following increasing in financing volume 9.2% 28.6% 8.8% 27.3% 9.1% 27.1% 35.0% 21.4% 37.1% 20.8% 36.7% 19.6% FYE21 FYE22 FYE23 4.7% 4.7% 5.9% 1.0% 0.2% 0.9% 0.3% 0.9% 0.6%  Revenue higher by 7.6% Volume (RM mil) FYE21 FYE22 FYE23 YoY contributed b

  16. Slide 16: Total Transaction & Financing Volume – Q4FYE23

    Total Transaction & Financing Volume – Q4FYE23 Sequential Volume Improvement Except Vehicle Financing Group 27.2% 25.5% 25.8% 26.8% 25.4% 28.4% 12.7% 11.1% 27.6% 10.9% 24.1% Q4 Q3 23.1% Q4 5.7% 7.4% 8.5% FYE22 3.3% FYE23 2.7% FYE23 3.2% 0.1% 0.1% 0.3% Q4 Q3 Q4  Motorcycle Financing was Volume (RM m

  17. Slide 17: Total Gross Financing Receivables

    Total Gross Financing Receivables Continual growth of key segments; Personal Financing Group & Vehicle Financing Group 27.8% 26.5% 26.4% 26.1% 27.0% 27.4% 34.8% 35.5% 34.7% Q4 Q3 6.5% Q4 6.6% 7.3% FYE22 3.8% FYE23 4.4% FYE23 4.8% 0.2% 0.1% 0.1% Q4 Q3 Q4 Increased QoQ to RM10.8 bil Volume (RM mil) Qo

  18. Slide 18: Receivables Collection

    Receivables Collection Maintain balance between sales expansion and credit criteria Receivables Collection Trend 96.6 98.2 98.5 96.8 97.7 97.3 97.5 97.2 84.4 85.6 82.4 81.0 79.1 79.8 71.2 70.6 76.9 78.4 72.1 68.9 69.2 67.7 62.1 59.6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FYE21 FYE22 FYE23 Current Colle

  19. Slide 19: Non-Performing Loan (NPL)

    Non-Performing Loan (NPL) Prudent risk and portfolio management NPL Trend 2.46 2.66 2.54 2.89  QoQ Balance D3+ increased attributed to lower collection performance for Vehicle Financing and Objective Financing  Implementation Mandatory e- KYC requirement to all 10,078 9,857 10,592 10,836 merchants

  20. Slide 20: Net Credit Cost (NCC)

    Net Credit Cost (NCC) Continuous prudent approach on provisioning NCC Trend 3.70% 4.31% 4.33% Higher annualised NCC: 3.04% 1.50%  Higher new sales impairment 2.52% 2.57% loss provision of RM105.7 mil 1.47% 1.75% attributed to higher receivables -0.72% movement of RM978.4 mil  Higher written off by

  21. Slide 21: Impairment Loss (IL) Analysis

    Impairment Loss (IL) Analysis Higher IL attributed to higher delinquent receivables and bad debt written off 346% 339% Expected Credit Loss (ECL) provision 289% attributed by: 252%  Higher ECL provision of RM31 mil 104 151 31 (FYE22: reversal of ECL provision of –RM85.8 mil) due to higher specific

  22. Slide 22: Cost-to-Income Ratio (CIR)

    Cost-to-Income Ratio (CIR) FYE23 operational efficiency (excluding IL) improved YoY due to prudent cost management Q4 Q4 RM mil YoY FYE22 FYE23 YoY FYE22 FYE23 Total Operating Income 406.1 481.2 18.5% 1,706.2 1,837.5 7.7% Personnel Expenses 63.9 67.4 5.4% 226.8 219.4 -3.3% Advertisement & Promotion

  23. Slide 23: Business & Operational Strategy

    BUSINESS & OPERATIONAL STRATEGY

  24. Slide 24: Group Strategy for FYE2023 – 2026

    Group Strategy for FYE2023 – 2026 Driving growth for a sustainable future Receivables Growth Enhance Customer Experience Employees Development Solid ESG Progress Increase profitability by Expansion of services and Building employees Financial inclusion and focusing on areas of membership capabilitie

  25. Slide 25: Progression in FYE2024: Customers' Journey and Experience

    Progression in FYE2024 Continuous enhancement in our Customers’ Journey and Experience New AEON Wallet Customer Centric  Development of All-New Wallet app  Establishment of AEON Group Common ID and Group Data Management Platform to reach AEON Living Zone  Integration Express card to the New Walle

  26. Slide 26: Progression in FYE2024 (Cont'd)

    Progression in FYE2024 (Cont’d) Continuous enhancement in our Customers’ Journey and Experience Card Business Operational Efficiency  AEON Retail collaboration and intensify cross selling activities  Accelerate auto approval ratio to 30% by implementing AI scoring models  Streamline card feature

  27. Slide 27: Progression in FYE2024 (Cont'd)

    Progression in FYE2024 (Cont’d) Developing employees and support community’s financial needs Working Environment ESG & Sustainability  Transform new working environment  Taskforce on Climate-related Financial Disclosure (TCFD)  Talent development & acquisition To establish climate action framewor

  28. Slide 28: FYE2024 Indicators

    FYE2024 Indicators Continue deliver sustainable returns to shareholders ≥ 30% ±15% ±10% < 57% of PAT Dividend Loan Growth Cost-to-income ROE Payout Ratio Growth Drivers Maintain strong operation Expand customer base; drive Credit card, Personal Accelerate automation to expense discipline whilst rece

  29. Slide 29: Digital Bank Timeline for FYE2022 – 2023

    Digital Bank Timeline for FYE2022 – 2023 Launch within 24 months from April 2022 System Development  As the joint venture parties cease negotiation, AEON appointed a technology partner to develop our planned tech stack which has started in Oct’22. AEON will continue with the operational readiness p

  30. Slide 30: Appendices

    yzoy) ALCON CREDIT SERVICE APPENDICES

  31. Slide 31: Performance Highlights

    Performance Highlights Q4 Q1 Q2 Q3 Q4 (RM mil) QoQ YoY FYE22 FYE23 YoY FYE22 FYE23 FYE23 FYE23 FYE23 Total Transaction & Financing 1,463.4 1,486.7 1,612.4 1,548.6 1,599.3 3.3% 9.3% 4,768.6 6,247.0 31.0% Volume Credit Card 397.9 410.0 394.3 394.8 428.7 8.6% 7.7% 1,456.2 1,627.8 11.8% Easy Payment Fin

  32. Slide 32: Financial Summary

    Financial Summary Q4 Q1 Q2 Q3 Q4 (RM mil) QoQ YoY FYE22 FYE23 FYE23 FYE23 FYE23 Credit Card 722.0 676.1 675.1 689.1 717.9 4.2% -0.6% Card Purchase 701.6 656.9 652.6 664.3 690.6 4.0% -1.6% Cash Advance 20.4 19.2 22.5 24.8 27.3 10.2% 34.0% Personal Financing 2,574.7 2,604.7 2,745.9 2,861.6 2,970.9 3.8

  33. Slide 33: Operating Income

    Operating Income Q4 Q1 Q2 Q3 Q4 (RM mil) QoQ YoY FYE22 FYE23 YoY FYE22 FYE23 FYE23 FYE23 FYE23 Credit Card 35.9 35.3 36.2 38.2 39.3 2.8% 9.5% 134.4 149.0 10.9% Personal Financing 99.1 102.8 106.9 113.6 121.4 6.8% 22.5% 416.4 444.6 6.8% Objective Financing 17.5 21.7 22.3 24.7 28.2 14.0% 61.0% 71.8 96

  34. Slide 34: Total Expenses

    Total Expenses Q4 Q1 Q2 Q3 Q4 (RM mil) QoQ YoY FYE22 FYE23 YoY FYE22 FYE23 FYE23 FYE23 FYE23 Impairment Loss on 154.7 37.3 150.0 143.3 117.2 -18.3% -24.2% 303.3 447.8 47.6% Receivables Personnel Expenses 63.9 43.1 52.5 56.3 67.4 19.6% 5.4% 226.8 219.4 -3.3% Advertisement & Promotion 7.3 8.3 5.8 7.8

  35. Slide 35: Financial Indicators

    Financial Indicators FYE20 FYE21 FYE22 FYE23 PBT (RM mil) 390.4 324.9 526.8 547.0 PAT (RM mil) 292.0 234.0 365.4 417.7 Weighted average no. of ordinary shares (mil) 255.3 255.3 255.3 255.3 Basic EPS (RM)* 1.07 0.88 1.39 1.60 NTA per share (RM) 6.1 6.6 7.8 9.1 ROE (%)* 18.0 13.8 19.2 18.8 ROA (%)* 3.

  36. Slide 36: 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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