Aeon Credit Service (m) Bhd. · MYX:AEONCR
Aeon Credit Service (m) Bhd — Q4 FYE2021 Earnings Presentation
34 slides from Aeon Credit Service (m) Bhd's earnings presentation, Apr 8, 2021
Slide 1: Q4 / 12M FYE2021 Results Update
Listing Board : Bursa Malaysia Securities Berhad, Main Market Stock Name/ Code : AEONCR / 5139 Q4 / 12M FYE2021 Results Update 8 April 2021
Slide 2: Disclaimer
Disclaimer 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 warranty, whether ex
Slide 3: Table of Content
Table of Content 01 Key Highlights 02 Financial Overview 03 Operational Updates 04 FYE21 Review & FYE22 Strategies 3
Slide 4: Key Highlights
JEON Key Highlights
Slide 5: Key Highlights
Key Highlights I Sailing Through Advancing the Looking Towards Recovery Waves IT Adoption Sustainable Growth Underpinned by resilient asset quality, Transform physical and conventional Diversifying product and service rigorously growing transaction and processing to online with digitalisation offeri
Slide 6: Financial Overview
JEON Financial Overview
Slide 7: Performance Highlights
Performance Highlights A year of sustaining the drive with healthy asset quality to overcome COVID-19 pandemic impacts and agile actions taken towards recovery YOY FYE20 FYE21 Change Revenue RM1,598.8M RM1,561.7M -2.3% Profitability PAT RM292.0M RM233.9M -19.9% ROE 18.0% 13.8% -4.2% Transaction & Fi
Slide 8: Income Statement – FYE21
Income Statement – FYE21 COVID-19 pandemic hit especially in 1H, counteractions focusing on cost management, asset quality enhancement and customer supports Total Transaction & Financing Volume (RM mil) Revenue (RM mil) 6,381.0 1,598.8 1,561.7 5,200.6 1,365.8 4,228.8 -33.7% YoY -2.3% YoY FYE FYE FYE
Slide 9: Income Statement – Q4FYE21
Income Statement – Q4FYE21 PAT improved 169.8% QoQ and 28.7% YoY boosted by recovery activities and improved asset quality Total Transaction & Financing Volume (RM mil) Revenue (RM mil) 1,645.5 413.3 406.3 401.5 1,224.4 1,263.4 389.9 962.4 364.0 778.6 +3.2% QoQ +1.2% QoQ -23.2% YoY -1.7% YoY Q4 Q1 Q
Slide 10: Shareholder Value & Capital Management
Shareholder Value & Capital Management ROA & ROE recovered steadily QoQ; Strong capital position providing ample headroom for growth Gross Receivables (RM mil) ROA (%) 10,518.5 3.1 10,394.6 10,259.4 10,222.0 2.3 10,078.2 1.5 1.6 -1.4% QoQ +0.7% QoQ 1.0 -3.0% YoY -0.8% YoY Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3
Slide 11: Total Transaction & Financing Volume
Total Transaction & Financing Volume Credit Card and Motorcycle Financing remain as key drivers; E-money led the growth despite volatile economic condition Volume – Yearly Segmental Breakdown (%) 25.9% 26.5% 33.3% 25.9% 22.9% 13.4% 28.6% 15.0% 34.9% 28.0% 13.9% 9.7% FYE19 FYE20 FYE21 5.1% 5.5% 0.2%
Slide 12: Total Transaction & Financing Volume
Total Transaction & Financing Volume New sales acquired on moderate pace and gradually rejuvenating with 62% improvement seen from Q1 to Q4 Volume – Quarterly Segmental Breakdown (%) 29.9% 30.8% 29.5% 20.4% 17.7% 18.8% 15.8% 34.9% 32.9% 8.9% 26.0% Q4 Q3 9.1% Q4 FYE20 5.7% FYE21 4.4% FYE21 5.6% 2.0%
Slide 13: Total Financing Receivables
Total Financing Receivables Emphasized on strengthening in asset quality for sustainable growth Gross Receivables – Quarterly Segmental Breakdown (%) 28.6% 28.8% 28.5% 27.6% 25.8% 25.6% 31.1% 33.8% 34.7% Q4 8.8% Q3 8.2% Q4 8.0% FYE20 3.4% 0.5% FYE21 3.0% 0.4% FYE21 2.9% 0.3% Receivables Movement Vol
Slide 14: Receivables Collection
Receivables Collection Successfully normalised the collection ratio as supported by effective collection strategies and improved asset quality Receivables Collection Trend 98.0% 98.1% 98.6% 98.2% 95.5% 96.9% 88.5% 84.4% 82.6% 81.2% 78.1% 86.2% 76.9% 71.2% 70.3% 77.5% 76.5% 66.9% Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 15: Non-Performing Loans (NPL)
Non-Performing Loans (NPL) NPL eased in Q4 FYE21 with prudent risk and portfolio management NPL Trend 20,000 2.88 2.46 18,000 2.04 1.92 1.95 16,000 1.42 14,000 10,222 12,000 10,395 10,518 10,259 10,078 1.00 10,000 8,692 8,000 6,000 4,000 2,000 0 0.10 Q4 Q4 Q1 Q2 Q3 Q4 FYE19 FYE20 FYE21 FYE21 FYE21 F
Slide 16: Net Credit Cost (NCC)
Net Credit Cost (NCC) NCC significantly reduced in Q4 FYE21 as a result of impairment loss reversal benefited from better delinquency movement NCC Trend 250 6.12 7.00 4.58 4.65 6.00 3.74 200 3.41 160 5.00 123 4.00 2.16 150 3.00 100 77 2.00 52 51 1.00 24 50 0.00 0 -1.00 Q4 Q4 Q1 Q2 Q3 Q4 FYE19 FYE20
Slide 17: Impairment Loss (IL) Analysis
Impairment Loss (IL) Analysis Lower impairment loss in Q4 FYE21 driven by collection improvement 250,000 507% 346% 417% 200,000 331% 318% 339% 500% 150,000 0% 69,176 101,043 10,922 100,000 -500% 74,019 157,795 50,000 100,499 105,192 83,603 37,993 55,866 -1000% 0 Reversal of -12,686 impairment loss a
Slide 18: Cost-to-Income Ratio
Cost-to-Income Ratio Cost efficiency improved due to prudent cost management contributed by lower Personnel, Advertisement & Promotion Expenses Q4 Q4 12M 12M (RM mil) YoY YoY FYE20 FYE21 FYE20 FYE21 Total Operating Income 454.9 453.2 -0.4% 1,744.7 1,707.0 -2.2% Total Operating Expenses Total Impairm
Slide 19: Dividend
Dividend Consistent payout ratio above 30% FYE19 FYE20 FYE21 Dividend RM RM RM Interim dividend (cent) 22.25 22.25 9.20 Payout amount (RM’000) 55,784 56,426 23,488 Final dividend (cent) 22.35 14.00 20.00* Payout amount (RM’000) 56,075 35,511 51,062* Total dividend (cent) 44.60 36.25 29.20 Total payo
Slide 20: Operational Updates
JEON Operational Updates
Slide 21: Continuously Supporting Customers
Continuously Supporting Customers Actively engaging with customers to understand their financial needs; Taking care of their safety at our branches/ service centres Representing <4.5% of total receivables Financial Assistance Targeted Delinquency Description Offering Period Type of Financing Program
Slide 22: Business Recovery
Business Recovery New sales slightly decreased due to the reimposition of MCO in Jan 21 Continue focusing on new sales collection while approval ratio remains healthy Receivables (RM mil) New Sales Collection (%) Last Year New Sales Approval Ratio New Sales (RM mil) (%) Collection (%) 11,000 100 800
Slide 23: FYE21 Review & FYE22 Strategies
FYE21 Review & FYE22 Strategies
Slide 24: Sales & Receivables Growth Strategy
Sales & Receivables Growth Strategy Achieve sustainable balance between asset growth and receivables collection FYE21 FYE22 Reinforced a solid asset quality base Steadily driving towards healthy business expansion Analysis AEON Strategy 1: Focusing on Receivables Growth customer ✓ Speed up AEON data
Slide 25: Value Chain Digitalization
Value Chain Digitalization Provide seamless customer experience by create consumer digital on boarding Transformation Roadmap B2C2B transformation (direct customer touchpoint) Credit analysis (e.g.:develop credit Online forms available for all Following up with scores & scoring model to improve pr
Slide 26: Regionalisation
Regionalisation FYE21-FYE22 Strategies Improve efficiency and effectiveness Regional Hub Concept Telemarketing Expansion ❑ Establish Centralised Localized Guideline Regional Office Hub ❑ Setup nationwide 2.0 telemarketing center ❑ Talent training and Branch Rationalization ❑ Prioritize Easy developm
Slide 27: Digital Infrastructure Development & System Architecture
Digital Infrastructure Development & System Architecture ❖ Design and develop a more comprehensive system architecture to support digital transformation ❖ Create an e-commerce platform for digital business ❖ Adopt B2C2B model to facilitate the business with merchants and capture customer needs ❖ Int
Slide 28: Appendices
JEON Appendices
Slide 29: Performance Highlights
Performance Highlights Q4 Q1 Q2 Q3 Q4 QoQ YoY YoY (RM mil) FYE20 FYE21 FYE20 FYE21 FYE21 FYE21 FYE21 (%) (%) % Total Transaction & 1,645.5 778.6 962.4 1,224.4 1,263.4 3.2% -23.2% 6,381.0 4,228.8 -33.7% Financing Volume Credit Card 493.4 331.8 394.7 376.9 372.9 -1.1% -24.4% 1,827.3 1,476.3 -19.2% Eas
Slide 30: Financial Summary
Financial Summary Q4 Q1 Q2 Q3 Q4 QoQ YoY (RM mil) FYE20 FYE21 FYE21 FYE21 FYE21 (%) (%) Credit Card 916.9 838.5 829.8 839.3 810.1 -3.5% -11.6% Card Purchase 856.1 779.9 769.9 769.0 727.5 -5.4% -15.0% Cash Advance 60.8 58.6 59.9 70.3 82.6 17.5% 35.8% Personal Financing 2,864.4 2,875.2 2,679.8 2,639.9
Slide 31: Operating Income
Operating Income Q4 Q1 Q2 Q3 Q4 QoQ YoY YoY (RM mil) FYE20 FYE21 FYE20 FYE21 FYE21 FYE21 FYE21 (%) (%) (%) Credit Card 37.9 34.1 35.1 38.2 36.7 -4.0% -3.3% 134.6 144.1 7.0% Personal Financing 129.3 119.3 100.7 113.6 113.6 0.0% -12.1% 515.1 447.2 -13.2% Objective Financing 21.3 19.6 19.6 16.9 16.9 0.
Slide 32: Total Expenses
Total Expenses Q4 Q1 Q2 Q3 Q4 QoQ YoY YoY (RM mil) FYE20 FYE21 FYE20 FYE21 FYE21 FYE21 FYE21 (%) (%) (%) Total Impairment Loss 87.8 174.4 112.0 156.9 65.1 -58.5% -25.8% 450.3 508.4 13.0% Personnel Expenses 65.1 35.9 48.1 55.4 58.6 5.7% -10.0% 250.1 198.0 -20.8% Advertisement & 32.5 12.2 12.9 12.4 8.
Slide 33: Financial Indicators
Financial Indicators (RM mil) FYE18 FYE19 FYE20 FYE21 PBT 398.3 472.2 390.4 324.9 PAT 300.1 354.6 292.0 233.9 Weighted average no. of ordinary shares 206.0 255.3 255.3 255.3 (mil unit) Basic EPS (RM)* 1.4 1.3 1.1 0.88 NTA per share (RM) 6.4 6.0 6.1 6.6 ROE (%)* 22.6 22.1 18.0 13.8 ROA (%)* 4.0 4.3 3
Slide 34: Thank You
Head Office Mr Lee Kit Seong Level 18, UOA Corporate Tower, Chief Corporate Officer Avenue 10, The Vertical, leeks@aeoncredit.com.my Bangsar South City, 03-2772 9000 No. 8, Jalan Kerinchi, 59200 Kuala Lumpur. Ms Lee Siew Tee www.aeoncredit.com.my Chief Financial Officer stlee@aeoncredit.com.my 03-27
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