Aditya Birla Capital Ltd. · NSE:ABCAPITAL
Aditya Birla Capital — FY2019 Earnings Presentation
50 slides from Aditya Birla Capital's earnings presentation, May 4, 2019
Slide 1: Cover letter: Presentation on Audited Financial Results FY19
ADITYA BIRLA CAPITAL PROTECTING INVESTING FINANCING ADVISING Ref: No. ABCL/SD/MUM/2019-20/MAY/03 4 May, 2019 BSE Limited The National Stock Exchange of India Ltd Phiroze Jeejeebhoy Towers, Exchange Plaza, 5" Floor, Dalal Street, Plot. C/1, G-Block, Mumbai 400 001 Bandra-Kurla Complex, Bandra (East),
Slide 2: Investor Presentation: Financial Results FY19
Investor Presentation FINANCIAL RESULTS – FY19 MUMBAI 4th May 2019 A Leading Financial Services Conglomerate Aditya Birla Capital Limited
Slide 3: Table of contents
Table of contents 1 | Overview Pg. 3 - 6 2 | Business-wise Performance Pg. 7 - 44 3 | Consolidated Financials & Other Annexures Pg. 45 - 50 NOTE 1: The financials of Aditya Birla Capital Ltd are consolidated financials prepared based on Ind AS unless otherwise specified NOTE 2: The financial figures
Slide 4: FY19: Key Highlights
FY19: Key Highlights ✓ Consolidated PAT grew 26% y-o-y ✓ Housing Finance PBT crossed Rs 100 Cr Lending book1 of Rs 63,000+ Crore with AMC recorded highest ever profitability ✓ SME + Retail mix at 59% ✓ with PBT to AUM at 26 bps Life Insurance Ind. FYP2 grew 60% y-o-y, ✓ NBFC NIM expanded 33 bps y-o-
Slide 5: Delivering strong financial performance
Delivering strong financial performance Figures in Rs Crore PROTECTING INVESTING FINANCING C O N S O L I D AT E D 30% 6% 23% 29% 26% 8,008 63,119 16,570 871 2,49,937 2,65,109 6,146 51,379 12,841 693 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 Premium1 AAUM2 Lending Book3 Revenue4 PAT 1 Include
Slide 6: Consolidated PAT Reconciliation (IGAAP Vs. Ind AS)
Consolidated PAT Reconciliation (IGAAP Vs. Ind AS) Figures in Rs Crore Figures in Rs Crore FY19 PAT after MI (As per IGAAP) 975 EIR on assets and liabilities (35) ECL methodology adoption (24) MTM/ Fair Valuation (21) Non-controlling interest adj. on above 15 Group share on account of Ind AS on Join
Slide 7: Performance delivery along stated goals
Performance delivery along stated goals Figures in Rs Crore NBFC Housing Finance Asset Management Life Insurance Health Insurance Focus on retail and SME Increasing equity mix and retail Scale, product mix and quality Building profitable scale Scale and retail to drive value segments to drive value
Slide 8: Aditya Birla Finance Limited
Aditya Birla Finance Limited 7
Slide 9: Diversified portfolio with value accretive growth
Diversified portfolio with value accretive growth Figures in Rs Crore SME + Retail + HNI Large + Mid Corporate Others Diversified loan book with focus on 43,242 51,714 growth in higher margin segments Loan book 3% 3% SME + Retail + HNI mix grew by 27% y-o-y shift 50% 47% underway 47% +3% 50% NIM exp
Slide 10: Multiple products catering to a range of customer needs
Multiple products catering to a range of customer needs Figures in Rs Crore SME (27% of Loan Book) Retail (13% of Loan Book) HNI + Others (13% of Loan Book) 4% 2% 7% 16% 14% 14% 27% 27% 25% 21% 44% 55% 23% 24% 73% 73% 33% 40% 41% 38% FY 1 8 FY 1 9 FY 1 8 FY19 FY18 FY19 Broker Funding Supply Chain Fi
Slide 11: Multiple products catering to a range of customer needs
Multiple products catering to a range of customer needs Figures in Rs Crore Segment ATS Large & Mid Corporate (47% of Loan Book) Typical Nature of Transactions % of total book (Rs Crore) TL/WCDL ▪ Appraisal based on business cash flows along with ~55 collaterals to diversified industries 19% 39% 41%
Slide 12: Strong focus on growth with quality of loan book
Strong focus on growth with quality of loan book Figures in Rs Crore Delivered consistent loan book growth while Stage-wise assets and ECL Provisioning maintaining strong asset quality Asset Quality FY18 FY19 Gross Stage 1 & 2 99.09% 98.51% Secured loan book more than 80% Primarily focused on cash f
Slide 13: Highest ever margin despite challenging industry scenario
Highest ever margin despite challenging industry scenario Optimised borrowing cost in a hardening interest rate environment 8.3% 8.2% 8.0% 8.0% Cost of 7.8% +40bps Borrowing Factors contributing to margin expansion: ▪ Increasing product mix towards retail and SME Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 F
Slide 14: Well matched ALM with diversified borrowing mix
Well matched ALM with diversified borrowing mix ALM optimised for liquidity and costs Diversification across instruments and investors Cumulative Outflows Cumulative Inflows Borrowing Mix % Sourcing Mix % 100% 100% 80% 75% Bank Term Loan 41% 53% 39% 41% 14% 23% 19% 29% NCD 36% Mutual Fund 15% CP < 3
Slide 15: Key Financials – Aditya Birla Finance Limited
Key Financials – Aditya Birla Finance Limited ∆ LY% Quarter 4 Figures in Rs Crore Full Year ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 43,242 51,714 Lending book 43,242 51,714 20% +134 bps 11.12% 12.46% Average yield 11.29% 11.98% +69 bps 6.77% 7.22% Int
Slide 16: Aditya Birla Housing Finance Limited
Aditya Birla Housing Finance Limited 15
Slide 17: Value accretive growth
Value accretive growth Figures in Rs Crore Lending book at ~Rs 11,500 Cr 2.8x 11,405 Overall growth 40% y-o-y Strong growth 8,137 Affordable book at ~Rs 1,500 Cr (4x y-o-y) in Lending 4,136 Book Improvement in Cost Income Ratio FY17 FY18 FY19 Led by scale and operating efficiency 102% Improvement Ma
Slide 18: Systematic approach to build a healthy portfolio mix
Systematic approach to build a healthy portfolio mix Segment Mix (%) Margin accretive customer mix 12% 11% 7% CF 23% 30% 32% 26% 13% LAP Salaried 58% 5% Affordable 56% 58% 57% Non-Salaried 70% Home Loans 42% FY17 FY18 FY19 Home Loans Affordable LAP ATS: Rs 55 Lacs (LY: Rs 79 Lacs) 23% of affordable
Slide 19: Pan India distribution network
Pan India distribution network Stable Geographic Mix (%) Focus on increasing reach and building retail granularity # of Operational Branches 38% 40% 65 14% 13% 51 19% 19% 29% 28% FY18 FY19 FY18 FY19 North South East West Balanced distribution strategy Direct sourcing at 48% (PY: 45%) Tapping growth
Slide 20: Maintaining margins through interest rate cycles
Maintaining margins through interest rate cycles Optimised borrowing cost in a hardening 8.4% 8.3% interest rate environment 7.9% 8.0% Cost of Borrowing Maintained margins across interest rate cycles Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Yield NIM (incl. Fees) Demonstrating ability to successfully pass 9.
Slide 21: Prudent asset liability management
Prudent asset liability management Optimised ALM for liquidity and cost Diversification in borrowing mix and investor profile Cumulative Outflows Cumulative Inflows Borrowing Mix % Sourcing Mix % 100% 100% 85% 65% Term Loan 77% Bank 83% 20% 22% 25% 26% NCD 11% Mutual Fund 13% 8% 10% CP 7% Insurance
Slide 22: Key Financials – Aditya Birla Housing Finance Limited
Key Financials – Aditya Birla Housing Finance Limited ∆ LY% Quarter 4 Figures in Rs Crore Full Year ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 40% 8,137 11,405 Lending book 8,137 11,405 40% 9.77% 10.36% Average yield 9.92% 10.13% 6.94% 7.46% Interest cos
Slide 23: Aditya Birla Sun Life AMC Limited
Aditya Birla Sun Life AMC Limited 22
Slide 24: Profitable growth aided by improvement in asset mix
Profitable growth aided by improvement in asset mix Figures in Rs Crore Domestic Equity AAUM grew by 21% y-o-y 2,49,937 2,65,109 7,553 2 year CAGR stronger than industry growth1 : 9,831 Industry: 38% | ABLSAMC: 45% 1,87,955 7,361 1,59,120 1,56,021 Growth in Domestic Equity AAUM mix at 36% Overall AA
Slide 25: Continued focus on retail expansion
Continued focus on retail expansion Figures in Rs Crore Retail + HNI AUM1 at Rs ~1,25,000 Crore Increasing HNI 1.5x 1,24,948 Retail 1,15,505 Retail AUM grew ~2x over 2 years Retail 84,212 72,092 Penetration 71,670 55,806 (AUM) 28,406 43,835 52,856 Broad based penetration in B-30 cities Mar'17 Mar'18
Slide 26: Balanced Distribution Network
Balanced Distribution Network AAUM Sourcing Mix (%) Continue to strengthen distribution network 19% 270 > 75% of locations in B-30 cities; Plan to further 45% Locations expand in B-30 cities 22% 14% 17% 11% 88 Increasing presence through tie-ups with PSU and 45% Banks Co-operative Banks 27% Overall
Slide 27: Key Financials – Aditya Birla Sun Life AMC Limited
Key Financials – Aditya Birla Sun Life AMC Limited ∆ LY% Quarter 4 Figures in Rs Crore Full Year ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 2,47,529 2,46,480 Domestic AAUM 2,29,750 2,48,075 8% 3% 86,450 89,062 Domestic Equity AAUM 73,730 88,955 21% 10,91
Slide 28: Aditya Birla Sun Life Insurance Limited
Aditya Birla Sun Life Insurance Limited 27
Slide 29: Fast growing franchise with significant value creation
Fast growing franchise with significant value creation Figures in Rs Crore 1.8x 1,693 Individual FYP1 grew by 60% y-o-y Significantly higher than industry growth 1,059 921 Industry2: 9% | Private2: 12% | Top 4 Private2: 7% Individual FYP1 Growth Group FYP grew by 40% y-o-y Group business is value ac
Slide 30: Focus on value accretive product mix
Focus on value accretive product mix Figures in Rs Crore Increasing Share of Ind. Protection in Product Mix Improvement in VNB Margins1 3.0% 4.5% 6.4% 28.9% 32.9% 34.6% Gross VNB grew 57% y-o-y Protection 2x 608 Gross VNB 37% 32% 33% Non-Par 388 281 Net VNB Margin FY19 at 9.5% 24% Par FY18 Net VNB w
Slide 31: Balanced sourcing strategy with strong growth in partnerships
Balanced sourcing strategy with strong growth in partnerships Figures in Rs Crore Consistent increase in contribution of Partnership Channel Proprietary Channel 874 partnerships channel 807 819 Ind. FYP 252 Balanced distribution mix Partnerships contributing 52% of Ind. FYP FY18 FY19 FY18 FY19 24% 5
Slide 32: Focus on quality of business
Focus on quality of business +7% +6% Quality growth reflected by consistent 6% improvement in persistency ratios Persistency 71% 75% 78% 60% 64% 66% Ratios1 52% 55% 58% Focus on customer retention 13th month 25th month 37th month FY17 FY18 FY19 Ind. renewal premium grew 10% y-o-y Surrender % of 13.8
Slide 33: Fund performance
Fund performance Fund Performance across categories Assets under management Internal Benchmark Fund 40,442 8% 8% 13% 7% 10% 10% 36,867 6% 10% 10% 8% 34,523 7% 7% 1 Yr 5 Yr 1 Yr 5 Yr 1 Yr 5 Yr FY17 FY18 FY19 Assure Enhancer Maximiser (Debt Fund) (Balanced Fund) (Equity Fund) Robust performance agains
Slide 34: MCEV Bridge
MCEV Bridge Figures in Rs Crore RoEV: 15.0% 14.5% Growth Y-o-Y Aditya Birla Capital Limited 33
Slide 35: Sensitivity Analysis
Sensitivity Analysis Scenarios % Change in IEV % change in Gross VNB Reference Rates and Assets Increase of 100 bps in the reference rates 4.2% 15.3% Decrease of 100 bps in the reference rates (5.9%) (19.2%) Policy/premium discontinuance rates (proportionate) 10% increase (multiplicative) (0.5%) (3.
Slide 36: Key Financials – Aditya Birla Sun Life Insurance Limited
Key Financials – Aditya Birla Sun Life Insurance Limited ∆ LY% Quarter 4 Figures in Rs Crore Full Year ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 41% 491 691 Individual First year Premium 1,152 1,798 56% 473 540 Group First year Premium 1,511 2,119 1,148
Slide 37: Aditya Birla Health Insurance Limited
Aditya Birla Health Insurance Limited 36
Slide 38: Strong growth led by retail
Strong growth led by retail Figures in Rs Crore 497 GWP grew ~2x with 2.3 Mn lives covered 176 Retail GWP Mix: 65% (PY: 37%) Strong GWP 243 Group growth led by Retail 154 321 Retail Rapid distribution capacity build up 89 FY18 FY19 Focus on improving claims experience 94% Focus on Retail Claims Rati
Slide 39: Significantly scaled up distribution and provider network
Significantly scaled up distribution and provider network One of the largest 3rd party distribution capacities FY18 FY19 10 Banca tie-ups within 2 years of operation : Branches ▪ Including HDFC, DCB, RBL, Deutsche Bank, AU Bank, KVB, 59 59 and Citibank; Axis Bank signed; To go live in Q1 FY20 ▪ Mont
Slide 40: Differentiated value proposition to our customers
Differentiated value proposition to our customers Figures in Rs Crore Our Differentiators Fastest growing retail franchise in 2nd year of Customer Value Proposition (CVP) Distribution Scale & Quality launch with a clear path to profitability Combined ✓ Industry 1st incentivized ✓ Multi-distribution
Slide 41: Driving value through diversification
Driving value through diversification Retail % of Total GWP Improving margins by increasing retail mix ~10x 65% Retail GWP mix grew ~2x y-o-y to reach 65% Increasing 37% contribution of Retail GWP 6% FY 17 FY 18 FY19 Presence across 41 cities through 59 27% ~4x 35% Geographical branches and 800+ loc
Slide 42: Key Financials – Aditya Birla Health Insurance Limited
Key Financials – Aditya Birla Health Insurance Limited Quarter 4 Figures in Rs Crore Full Year ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters1 FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 48 121 Retail Premium 89 321 ~4x 23 60 Group Premium 154 176 71 181 Gross Written Premium 243 497 ~2x 71 181 Revenu
Slide 43: Other Financial Services businesses
Other Financial Services businesses
Slide 44: Other Financial Services Businesses
Other Financial Services Businesses Quarter 4 Figures in Rs Crore Full Year FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) Other Financial Services Businesses1 (PY) (CY) 154 152 Aggregate Revenue 456 633 (9) (8) Aggregate Profit Before Tax (1) (10) General • Premium placeme
Slide 45: Aggregate PBT
Aggregate PBT ∆ LY% Quarter 4 Figures in Rs Crore Full Year ∆ LY% FY 17-18 FY 18-19 FY 17-18 FY 18-19 Businesses (Aggregated on 100% basis) (PY) (CY) (PY) (CY) 281 353 NBFC 1,051 1,328 151 180 Asset Management 523 647 14 62 Life Insurance 130 131 13 40 Housing 34 107 1 0 General Insurance Broking 39
Slide 46: Annexure A Consolidated Financials
Annexure A Consolidated Financials
Slide 47: Consolidated Profit & Loss
Consolidated Profit & Loss Figures in Rs Crore Quarter 4 Figures in Rs Crore Full year ∆ LY% FY 17-18 FY 18-19 Consolidated Profit & Loss FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 32% 3,578 4,730 Revenue 11,524 15,164 32% 207 342 Profit Before Tax (before share of profit/(loss) of JVs 920 1,155 50 67 Ad
Slide 48: Aditya Birla Capital Limited
Aditya Birla Capital Limited CIN: L67120GJ2007PLC058890 Regd. Office: Indian Rayon Compound, Veraval – 362 266, Gujarat Corporate Office: One Indiabulls Centre, Tower 1, Jupiter Mills Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai – 400 013 Website: www.adityabirlacapital.com 47
Slide 49: Disclaimer
Disclaimer The information contained in this presentation is provided by Aditya Birla Capital Limited (“ABCL or the Company”), formerly known as Aditya Birla Financial Services Limited, to you solely for your reference. Any reference herein to "the Company" shall mean Aditya Birla Capital Limited, t
Slide 50: Glossary
Glossary ▪ AAUM – Annual Average Assets under Management ▪ HL – Home Loan ▪ Q3 – October – December ▪ ALM – Asset Liability Management ▪ JV – Joint Ventures ▪ Q4 – January – March ▪ ATS – Average Ticket Size ▪ LAP – Loan Against Property ▪ Rs – Indian Rupee ▪ FYP – First Year Premium Income ▪ LAS –