Aditya Birla Capital Ltd. · NSE:ABCAPITAL
Aditya Birla Capital — Q1 FY20 Earnings Presentation
47 slides from Aditya Birla Capital's earnings presentation, Aug 2, 2019
Slide 1: Investor Presentation: Financial Results Q1 FY20
Investor Presentation FINANCIAL RESULTS – Q1 FY20 MUMBAI 2nd August 2019 A Leading Financial Services Conglomerate Aditya Birla Capital Limited
Slide 2: Table of contents
Table of contents 1 | Overview Pg. 3 - 6 2 | Business-wise Performance Pg. 7 - 42 3 | Consolidated Financials & Other Annexures Pg. 43 - 47 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 3: Robust all-round performance
Robust all-round performance Figures in Rs Crore PROTECTING INVESTING FINANCING 5% 2% 16% 1,404 2,53,965 61,998 1,343 2,49,270 53,584 Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 Premium1 AAUM2 Lending Book3 1 | 30% Ind. APE4 growth in Life Insurance, 1 | PBT increased by 20% with PBT to AAUM 1 |
Slide 4: Key Financials
Key Financials C O N S O L I D AT E D Figures in Rs Crore Quarter 1 ∆ LY% FY 18-19 FY 19-20 Businesses (Aggregated on 100% basis) (PY) (CY) 16% 27% NBFC 335 401 20% 270 Asset Management 146 175 20% 3,962 Life Insurance 22 25 13% 3,424 213 Housing 13 39 ~3x General Insurance Broking 15 24 59% Stock &
Slide 5: Strong profitability track record over 5 years
Strong profitability track record over 5 years Figures in Rs Crore PBT (IndAS) PBT (IGAAP) CAGR: 21% 1,913 29% 552 1,554 1,150 427 995 849 727 FY14 FY15 FY16 FY17 FY18 FY19 Q1 FY19 Q1 FY20 Our Investment journey over last 5 years PBT Track- record (on 100% basis - IGAAP) Life Insurance impacted by C
Slide 6: The ABC platform
The ABC platform Diversified set of Multiple businesses at Ability to transport best in World of opportunities for businesses meeting different stages of scale class practices from one employees; Ability to distinct customer needs business to the other provide opportunities to talent across the plat
Slide 7: Aditya Birla Finance Limited
Aditya Birla Finance Limited 7
Slide 8: Diversified portfolio with value accretive growth
Diversified portfolio with value accretive growth Figures in Rs Crore SME + Retail + HNI Large + Mid Corporate Others Loan book grew by 13% y-o-y 44,408 50,171 2% 3% Loan book shift 50% 47% SME + Retail grew by 25% y-o-y underway Continue to diversify loan book with focus on 48% +2% 50% higher margi
Slide 9: Multiple products catering to a range of customer needs
Multiple products catering to a range of customer needs Figures in Rs Crore SME (Grew 20% y-o-y) Retail (Grew 36% y-o-y) HNI + Others % Mix 25% 27% 27% 12% 13% 15% 12% 13% 11% 4% 2% 2% 13% 7% 7% 11% 17% 27% 23% 11% 14% 26% 21% 23% 55% 53% 48% 24% 23% 23% 83% 73% 77% 35% 40% 41% 39% 38% 40% Q1 F Y 1
Slide 10: Multiple products catering to a range of customer needs
Multiple products catering to a range of customer needs Figures in Rs Crore Large & Mid Corporate (Grew 6% y-o-y) % of total book ATS Typical Nature of Transactions % Mix 50% 47% 47% TL/WCDL CY: ~50 ▪ Appraisal based on business cash flows along with 20% (PY: 55) collaterals to diversified industrie
Slide 11: Strong focus on growth with quality of loan book
Strong focus on growth with quality of loan book Figures in Rs Crore Secured loan book at ~80% of total Stage-wise assets and ECL Provisioning Primarily focused on cash flow based underwriting Asset Quality FY19 Q1 FY20 Maintaining robust asset quality Gross Stage 1 & 2 98.51% 98.31% Gross Stage 3 (
Slide 12: Consistent margin expansion across quarters
Consistent margin expansion across quarters Optimised borrowing cost in a hardening interest rate environment 8.25% 8.24% 8.26% 7.96% 8.04% Cost of 7.84% +42bps Borrowing Factors contributing to margin expansion: ▪ Increasing product mix towards retail and SME Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19
Slide 13: 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% 77% 77% Term Loan 36% Bank 37% 37% 40% NCD 39% Mutual Fund 17% 15% 21% 20% 28% CP < 3
Slide 14: Strategic Priorities
Strategic Priorities Diversified product & ▪ Continue to focus on SME & Retail sectors to drive growth customer strategy ▪ Recently launched new products in the retail consumer loan segment ▪ Expand physical footprint in smaller cities with lean branches leading to lower ticket sizes Build a broad-b
Slide 15: Key Financials – Aditya Birla Finance Limited
Key Financials – Aditya Birla Finance Limited Figures in Rs Crore Quarter 1 ∆ LY% Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) Lending book 44,408 50,171 Net Interest Income (Incl. Fee Income) 541 694 28% Average yield (Incl. Fee Income) 11.74% 12.71% +97 bps Interest cost / Avg. Lending b
Slide 16: Aditya Birla Housing Finance Limited
Aditya Birla Housing Finance Limited 16
Slide 17: Value accretive growth
Value accretive growth Figures in Rs Crore Lending book at ~Rs 11,830 Cr 11,827 Overall growth 29% y-o-y Strong growth 9,176 Affordable book at ~ Rs. 1700 Cr in Lending Book Improvement in Cost Income Ratio y-o-y Q1 FY19 Q1 FY20 Led by scale and operating efficiency 73% Improvement 47% Maintaining h
Slide 18: Systematic approach to build a healthy portfolio mix
Systematic approach to build a healthy portfolio mix Segment Mix (%) Margin accretive customer mix 9% 7% CF 25% 23% 30% 7% 14% LAP Salaried 60% Affordable 59% 56% Non-Salaried 70% Home Loans 40% Q1 FY19 Q1 FY20 Home Loans Affordable ATS: Rs 53 Lacs (LY: Rs 69 Lacs) ATS for Affordable Home Loans ~ Rs
Slide 19: Pan India distribution network
Pan India distribution network Stable Geographic Mix (%) Focus on increasing reach and building retail granularity Home Loan Book Home Loan Book (Metros) (Non-Metros) 37% 40% 60% 4,116 16% 3,905 14% 13% 3,358 19% 19% 2,577 29% 28% Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 Q1 FY19 Q1 FY20 North South East West
Slide 20: Maintaining margins through interest rate cycles
Maintaining margins through interest rate cycles Optimised borrowing cost in a hardening 8.41% 8.45% 8.31% interest rate environment 7.90% 8.00% Cost of Borrowing Maintained margins across interest rate cycles Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Yield NIM (incl. Fees) Demonstrating ability to su
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% 62% Term Loan 76% Bank 78% 18% 18% NCD 11% Mutual Fund 13% 11% 11% 12% 13% CP 8% Insurance
Slide 22: Key Financials – Aditya Birla Housing Finance Limited
Key Financials – Aditya Birla Housing Finance Limited Figures in Rs Crore Quarter 1 ∆ LY% Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) Lending book 9,176 11,827 29% Average yield (Incl. Fee Income) 10.04% 10.59% Interest cost / Avg. Loan book 7.15% 7.53% Net Interest Margin (incl. Fee Inco
Slide 23: Aditya Birla Sun Life AMC Limited
Aditya Birla Sun Life AMC Limited 23
Slide 24: Profitable growth aided by robust asset mix
Profitable growth aided by robust asset mix Figures in Rs Crore 2,70,360 Maintained domestic AAUM1 Market Share 2,67,175 7,671 6,646 Overall Domestic AAUM market share2 at 10.52% (PQ: 10.57%) 2,25,176 10,084 1,60,239 1,61,491 1,45,824 Fixed Income AAUM1 market share improved Growth in 10,234 9,749 M
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 1.3x 1,25,403 Retail 1,21,539 Retail AUM grew ~1.7x over 2 years Retail 94,826 74,298 70,444 Penetration 61,779 (AUM) 33,047 47,241 54,959 Broad based penetration in B-30 cities with Jun'17
Slide 26: Balanced Distribution Network
Balanced Distribution Network AAUM Sourcing Mix (%) Continue to strengthen distribution network Overall Equity 300 > 75% of locations in B-30 cities; Plan to further 19% 19% Locations expand in B-30 cities Direct 44% 45% 22% 21% 15% 13% National Distributor 17% 16% 88 Increasing presence through tie
Slide 27: Key Financials – Aditya Birla Sun Life AMC Limited
Key Financials – Aditya Birla Sun Life AMC Limited Figures in Rs Crore Quarter 1 ∆ LY% Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) Domestic AAUM 2,49,270 2,53,965 Domestic Equity AAUM 89,031 92,474 4% Alternate and Offshore Equity AAUM 10,234 9,749 Total Equity 99,266 1,02,223 Revenue 362
Slide 28: Aditya Birla Sun Life Insurance Limited
Aditya Birla Sun Life Insurance Limited 28
Slide 29: Fast growing franchise with significant value creation
Fast growing franchise with significant value creation Figures in Rs Crore Individual FYP1 grew by 30% y-o-y 35% 294 Significantly higher than industry growth 227 Industry2: 15% | Private2: 23% | Top 4 Private2: 29% 162 Individual FYP1 Growth Balanced distribution mix Partnership contributing 50% of
Slide 30: Focus on value accretive product mix
Focus on value accretive product mix Figures in Rs Crore Improving Product Mix Improvement in VNB Margins1 5% 9% 8% 37.2% 34.4% Gross VNB grew 19% y-o-y Protection 107 Gross VNB 23% 30% 35% Non-Par Net VNB Margin at (7.8)% 90 36% Par 24% 25% ULIP Q1 FY19 Q1 FY20 Factors contributing to 35% 37% 32% i
Slide 31: Balanced sourcing strategy
Balanced sourcing strategy Figures in Rs Crore Driving growth through partnerships and Partnership Channel Proprietary Channel 148 operating leverage in proprietary 147 147 Ind. FYP ▪ 9 Banca tie-ups incl. large banks viz. HDFC Bank, 80 DCB and KVB ▪ Pan India presence across 2,700+ cities through Q
Slide 32: Focus on quality of business
Focus on quality of business Continuous improvement in persistency +6% +4% +2% +5% +3% across periods Persistency 72% 78% 61% 65% 13th Month persistency at 78% (PY: 72%) Ratios1 54% 55% 46% 51% 41% 44% HDFC Bank experience will lead to further improvement 13th month 25th month 37th month 49th month
Slide 33: Fund performance
Fund performance Assets under management Fund Performance across categories Internal Benchmark Fund 41,011 9% 37,582 8% 8% 7% 10% 9% 10% 9% 9% 8% 7% 7% 35,180 Q1FY18 Q1FY19 Q1FY20 1 Yr 5 Yr 1 Yr 5 Yr 1 Yr 5 Yr Assure Enhancer Maximiser (Debt Fund) (Balanced Fund) (Equity Fund) Healthy in-force book,
Slide 34: Key Financials – Aditya Birla Sun Life Insurance Limited
Key Financials – Aditya Birla Sun Life Insurance Limited Figures in Rs Crore Quarter 1 ∆ LY% Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) Individual First year Premium 249 322 29% Group First year Premium 393 188 Renewal Premium 625 751 20% Total Gross Premium 1,267 1,261 Opex (Excl. Commi
Slide 35: Aditya Birla Health Insurance Limited
Aditya Birla Health Insurance Limited 35
Slide 36: Strong growth led by retail
Strong growth led by retail Figures in Rs Crore GWP doubled with increasing retail mix 1.9x 143 Retail GWP Mix: 64% (PY: 61%) Strong GWP 51 Group 76 growth led by Retail 29 92 Retail 3.7+ million lives covered 47 Grew ~ 4x y-o-y (PY: 1 million lives) Q1 FY19 Q1 FY20 Focus on Improved retail Claim Ra
Slide 37: Significantly scaled up distribution and provider network
Significantly scaled up distribution and provider network One of the largest 3rd party distribution capacities Jun‘18 Jun’19 • 10 Banca tie-ups incl. large banks like HDFC Bank, Axis Bank • 10,000+ bank branches through Banca channel Branches 59 59 • Monthly utilization of available capacity still l
Slide 38: Customer Segments
Expanding market through customer value proposition Comprehensive Product suite enabling traditional & non traditional customer acquisition Expanding the Market Comprehensive Product Suite Outcome Active Health / Assure - Industry Younger customer base 1st incentivized wellness product Customer Segm
Slide 39: Driving value through diversification
Driving value through diversification Increase in geographic outreach across 850+ cities 32% 39% Geographical Non-metro GWP contributing 39% Diversification (% non-metro) Q1 FY19 Q1 FY20 Share of high margin fixed benefit product at a 61% healthy 17% Banca 54% sourcing % of Retail GWP Banca channel
Slide 40: Key Financials – Aditya Birla Health Insurance Limited
Key Financials – Aditya Birla Health Insurance Limited Figures in Rs Crore Quarter 1 ∆ LY% Key Performance Parameters1 FY 18-19 FY 19-20 (PY) (CY) Retail Premium 47 92 2.0x Group Premium 29 51 Gross Written Premium 76 143 1.9x Revenue 77 146 Combined Ratio 190% 146% Profit Before Tax (65) (65) Adity
Slide 41: Other Financial Services businesses
Other Financial Services businesses
Slide 42: Other Financial Services Businesses
Other Financial Services Businesses Figures in Rs Crore Quarter 1 Key Performance Parameters FY 18-19 FY 19-20 Other Financial Services Businesses1 (PY) (CY) Aggregate Revenue 165 186 Aggregate Profit Before Tax 3 21 General • Premium placement grew y-o-y by 16% to Rs 1,162 Crore Insurance • Revenue
Slide 43: Annexure A Consolidated Financials
Annexure A Consolidated Financials
Slide 44: Consolidated Profit & Loss
Consolidated Profit & Loss Figures in Rs Crore Figures in Rs Crore Quarter 1 ∆ LY% Consolidated Profit & Loss FY 18-19 FY 19-20 (PY) (CY) Revenue 3,063 3,646 19% Profit Before Tax (before share of profit/(loss) of JVs 282 378 Add: Share of Profit/(loss) of associate and Joint ventures 51 59 Profit B
Slide 45: 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 45
Slide 46: 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 47: Glossary
Glossary ▪ AAUM – Quarterly 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