Aditya Birla Capital Ltd. · NSE:ABCAPITAL
Aditya Birla Capital — FY2020 Earnings Presentation
60 slides from Aditya Birla Capital's earnings presentation, Jun 5, 2020
Slide 1: Regulation 30 intimation letter to stock exchanges
ADITYA BIRLA CAPITAL PROTECTING INVESTING FINANCING ADVISING BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001 Scrip Code: 540691 Scrip ID: ABCAPITAL 5 June 2020 The National Stock Exchange of India Ltd Exchange Plaza, 5" Floor, Plot. C/1, G-Block, Bandra-Kurla Complex, Bandra (Eas
Slide 2: Investor Presentation: Financial Results – FY20
Investor Presentation FINANCIAL RESULTS – FY20 MUMBAI 5th June 2020 A Leading Financial Services Conglomerate Aditya Birla Capital Limited
Slide 3: Table of contents
Table of contents 1 | Overview Pg. 3 - 8 2 | Business-wise Performance Pg. 9 - 55 3 | Consolidated Financials & Other Annexures Pg. 56 - 59 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: Our response to the Lockdown
Our response to the Lockdown Employee Heath and Safety ▪ Identified Flu Prevention Managers across all 24x7 Doctor-on-call Complete test for ▪ One of the early companies to go 100% WFH a week Business Continuity regions to monitor and report on employee health + health partner 100% WFH before lockdo
Slide 5: FY 20: Key highlights
FY 20: Key highlights Consistent profit delivery from diversification; AMC PAT grew 10% y-o-y, maintaining equity mix at ✓ Consolidated ABCL FY20 PAT grew by 6% y-o-y; ✓ 36% with PBT to AAUM1 at 26 bps PAT (ex-CoVID provision) grew by 15% y-o-y NBFC NIM2 expanded y-o-y by 38 bps to 5.29%; led ✓ Tota
Slide 6: FY20: Key Financials
FY20: Key Financials C O N S O L I D AT E D Figures in Rs Crore Full Year ∆ LY% Businesses FY 19 FY 20 9% 6% NBFC 869 821 18,028 920 Asset Management 448 494 10% 16,570 871 Life Insurance 107 103 Housing 74 103 38% General Insurance Broking 20 31 56% Stock & Securities Broking 10 12 20% FY19 FY20 FY
Slide 7: Progress on digitalization: Customer and Advisor Onboarding
Progress on digitalization: Customer and Advisor Onboarding Digital Assets Deployment Outcomes Customer direct digital % Customers onboarded digitally Onboarding/ Purchase Key Business Status Digitization of customer 95% 98% 100% Q4 FY19 onboarding journeys leveraging Mutual Fund 77% 76% biometric,
Slide 8: Progress on digitalization: Customer Servicing
Progress on digitalization: Customer Servicing Digital Assets Deployment Outcomes No of registered customers for No of customer initiated interactions Website/ mobile apps Key Business Status WhatsApp services across ABC (Lacs) on WhatsApp across ABC (Lacs) Expansion of digital self service 4.6 chan
Slide 9: Future digitalization initiatives underway
Future digitalization initiatives underway # Initiatives Future technology readiness 1 Integrated audio + video + chat + co-browsing technology To provide remote advisory by sales / partners for touchless pre-sales and purchase experience Developing self service Voice channel to service top queries
Slide 10: Aditya Birla Finance Limited
Aditya Birla Finance Limited 9
Slide 11: Business resilience under Lockdown
Business resilience under Lockdown 1 Employee Safety 2 Strong focus on portfolio ▪ ▪ Active and positive engagement with all employees, across multiple channels ▪ ~80% portfolio is secured - average security cover >1.5x ▪ Before opening of any branch, full sanitization undertaken; housekeeping and s
Slide 12: Improving NIM: Rebalancing the portfolio along stated strategy
Rebalancing the portfolio along stated strategy Figures in Rs Crore Margin Improvement Driven by Product Mix Change and repricing Focusing New Disbursement in Select Growth Segments SME + Retail + HNI Large + Mid Corporate Others Loan Book Mix 43,242 51,714 47,057 3% 3% 5% 50% 47% 45% 47% 50% 50% FY
Slide 13: Building granularity across segments
Building granularity across segments Loan book 11,368 13,771 12,778 Loan Book 21,707 24,426 21,344 % Mix 26% 27% 27% % Mix 50% 47% 45% Large/ Mid Corporate ATS (Rs Crore) 7 7 5 ATS (Rs Crore) 76 68 59 4% 2% 1% 8% 11% Structured Finance 19% 14% Broker Funding 14% 14% 13% SME 21% 12% 15% Supply Chain
Slide 14: Continued delivery of strong core operating profit
Continued delivery of strong core operating profit Figures in Rs Crore 2 year CAGR: 21% Cost optimization aided by productivity Net Interest Income1 Cost Income Ratio 2,570 2,273 34.3% 31.3% 32.1% 1,761 FY18 FY19 FY20 FY18 FY19 FY20 NIM1 % 4.54% 4.91% 5.29% Opex2 % 1.50% 1.73% 1.72% Optimised borrow
Slide 15: Increased provisions given the environment
Increased provisions given the environment Stage-wise assets and with enhanced provision coverage Credit Cost % of Avg. Loan Book Q3 FY20 Q4 FY20 Figures in Rs Crores Stage 1 & 2 Stage 3 Stage 1 & 2 Stage 3 1.45% Loan Book 46,635 1,298 45,360 1,697 IL&FS Ex-IL&FS IL&FS Ex-IL&FS % of Loan Book (Gross
Slide 16: Well matched ALM with adequate liquidity
Well matched ALM with adequate liquidity Figures in Rs Crore ALM optimised for liquidity and costs (As on Apr’20) Adequate liquidity under stress test scenario Liability Maturity (FY21) Fund Available as on 31st May (Including interest payments) (Assuming 50% of collections) Cumulative Outflows Cumu
Slide 17: Way Forward in FY21
Way Forward in FY21 New Business ▪ Retail secured loans and high quality salaried personal loans ▪ Leverage Emergency Credit Line (100% Credit Guarantee from NCGTCL) for top-up loans to existing Retail, SME clients ▪ Leverage CGTMSE (SIDBI) Program for new unsecured loans to retail MSME customers St
Slide 18: Key Financials – Aditya Birla Finance Limited
Key Financials – Aditya Birla Finance Limited Quarter 4 Figures in Rs Crore Full Year ∆ LY% FY 18-19 FY 19-20 Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) (PY) (CY) 51,714 47,057 Lending book 51,714 47,057 12.40% 12.31% Average yield (Incl. Fee Income) 11.93% 12.42% +49 bps 7.16% 7.08% Int
Slide 19: Aditya Birla Housing Finance Limited
Aditya Birla Housing Finance Limited 18
Slide 20: Business resilience under Lockdown
Business resilience under Lockdown 1 Portfolio 2 Liquidity/ Balance Sheet management ▪ Connect with 100% customers across targeted segments ▪ Raised Rs 400 Cr from NCD in April’20 ▪ AI Voice Bot implemented with Fin-Tech Partner, assisting in extensive calling on ▪ Received sanction of Rs 228 Cr fro
Slide 21: Increasing retailisation with focus on margins
Increasing retailisation with focus on margins Figures in Rs Crore Growing loan book with increased retail mix Our approach in FY20 Loan Book Retail Mix Home Loans Affordable Increasing Reduction in Greater Granularity Realization Construction Finance 2Y CAGR: 22% 89% → 95% 2Y CAGR: 30% 6x over 2 ye
Slide 22: Sourcing Strategy and Customer Mix
Sourcing Strategy Diversified Geographic Mix (%) Focus on increasing reach and building retail granularity Metros Non-Metros Home Loans Sourcing 4,338 4,528 38% 40% 42% 12% 3,799 Non-metro loan 14% 13% 11% 3,403 book mix at 46% 19% 19% 19% 65 branches currently operational pan-India 29% 28% 28% FY19
Slide 23: Delivering strong core operating profits
Delivering strong core operating profits Figures in Rs Crore Maintained margins with change in product mix CIR improvement aided by scale and operating efficiency Reducing construction finance and increasing affordable home loans mix Net Interest Income1 328 71.1% Cost Income Ratio 310 61.4% 2 year
Slide 24: Update on portfolio quality
Update on portfolio quality Stage-wise assets and provision coverage Secured loan book provides safety Q3 FY20 Q4 FY20 % of Segment Loan Book GS3 % PCR % NS3 % GS3 Provision LTV% Figures in Rs Crores Stage 1 & 2 Stage 3 Stage 1 & 2 Stage 3 Home Loan 1.30% 32% 0.88% 108 34 64% Loan Book 12,063 127 11
Slide 25: Well matched ALM with adequate liquidity
Well matched ALM with adequate liquidity Figures in Rs Crore ALM optimised for liquidity and costs (As on Apr’20) Adequate liquidity under stress test scenario Cumulative Outflows Cumulative Inflows Liability Maturity (FY21) Fund Available as on 31st May 100% 100% (Including interest payments) (Assu
Slide 26: Value accretive growth
Value accretive growth PAT1 Return on Assets1 Return on Equity1,2 2 year Growth: 3x 2 year RoA increased by 60 bps 2 year RoA increased by 5.2% 9.8% 1.0% 116 0.7% 7.0% 74 4.6% 0.4% 38 FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY19 FY20 Aditya Birla Capital Limited 25 1 Excluding additional CoVID related pr
Slide 27: Way Forward in FY21
Way Forward in FY21 Portfolio Management ▪ Focus on segments to increase risk-adjusted-returns ▪ Focus on upsell/ cross-sell; Curating pre approved offers for customers through analytics ▪ Focus on collections: Start with caution, ▪ AI Voice Bot implemented with Fin-Tech Partner, assisting in extens
Slide 28: 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 18-19 FY 19-20 Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) (PY) (CY) 6% 11,405 12,102 Lending book 11,405 12,102 6% 10.36% 10.28% Average yield 10.13% 10.39% 7.46% 7.38% Net Intere
Slide 29: Aditya Birla Sun Life AMC Limited
Aditya Birla Sun Life AMC Limited 28
Slide 30: Business resilience under Lockdown
Business resilience under Lockdown Focus on investor/ distributor outreach, tech enablement, risk management and employees Performance under Lockdown 1 Investor and Distributor Outreach 2 Liquidity, Investment & Risk Management ▪ Nearly 1 Million digital transactions under lockdown ▪ 95% of transact
Slide 31: Building profitable scale through time
Building profitable scale through time Assets under management Consistent focus in growing high margin retail assets 5 year CAGR (Domestic AAUM1) ABSLAMC 19% Industry 19% 5 year CAGR ABSLAMC 25% Industry 17% 2,65,110 2,66,988 7.1 7.2 # of Folios 2,49,937 6.0 7,553 6,207 9,831 3.9 1,87,955 2.9 1,49,4
Slide 32: Strong growth across retail vectors in line with stated strategy
Strong growth across retail vectors in line with stated strategy # of Folios Domestic Equity SIP Retail AAUM B-30 AAUM Size Rs 90,234 Cr Count: 29.2 Lacs Rs 1,06,496 Cr Rs 33,550 Cr 7.2 Million AAUM Mix1 36% 38%2 47% 15% Market Share 8.01% 8.22% 9.90%3 8.25% 8.72% 5 Year CAGR 5 Year CAGR 3 Year CAGR
Slide 33: Continued focus on equity assets
Continued focus on equity assets Domestic Equity Assets 2nd fastest growing AMC amongst top 5 players1 5Y CAGR 88,955 90,234 AAUM 35% 24% 32% 40% 20% Equity Market Share Δ: FY15 +1.5% (4.4)% +0.9% +2.9% (4.0)% 73,730 15.4% 14.0% 8.2% 9.2% 8.1% 42,276 30,844 ABSLAMC HDFC MF ICICI MF SBI MF Nippon MF
Slide 34: Focus on retail expansion
Focus on retail expansion 2nd Highest 5Y CAGR amongst Top 5 AMCs 2nd Highest 5Y CAGR amongst Top 5 AMCs 5Y CAGR 5Y CAGR MAAUM1 18% 16% 17% 37% 7% MAAUM1 20% 13% 16% 32% 3% Retail Market Share B-30 Market Share2 Δ: Mar’15 (0.2)% (1.6)% (0.6)% 6% (4.4)% Δ: Mar’15 +1.5% (1.1)% +0.2% 10.3% (6.2)% 15.0%
Slide 35: Large and diversified digitally-enabled distribution network
Large and diversified digitally-enabled distribution network Continue to grow IFA share in equity sourcing Digital Tech enablement # Digital Transactions 3.7 4.2 1.1 1.0 1.0 1.4 1.0 (Millions) 19% 17% 14% 13% Bank 22% 20% 24% 22% National Distributor 45% 47% 95% 40% 42% IFA Physical 75% 75% 76% 81%
Slide 36: Improving profitability over time
Improving profitability over time Figures in Rs Crore PBT/ AAUM (bps) PAT Return on Equity Increase of 3 bps over two years 2Y CAGR: 19% Increase of 6.6% over 2 years (Δ: +9 bps over FY15) (5Y CAGR: 32%) (Δ: +15% over FY15) 494 26 26 448 37.9% 38.9% 23 32.3% 351 FY18 FY19 FY20 FY18 FY19 FY20 FY18 FY
Slide 37: Key Financials – Aditya Birla Sun Life AMC Limited
Key Financials – Aditya Birla Sun Life AMC Limited Quarter 4 Figures in Rs Crore Full Year FY 18-19 FY 19-20 Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) (PY) (CY) 2,46,480 2,47,522 Domestic AAUM 2,48,075 2,51,310 89,062 87,685 Domestic Equity AAUM 88,955 90,234 8,955 9,249 Alternate and O
Slide 38: Aditya Birla Sun Life Insurance Limited
Aditya Birla Sun Life Insurance Limited 37
Slide 39: Business resilience under Lockdown
Business resilience under Lockdown Steps taken to ensure business continuity, customer servicing and employee safety Performance under Lockdown 1 Sales Continuity 2 Customer Service 100% of Individual Business sourced digitally ▪ 92% of Front-Line Sales activated in April ▪ 1,041 claims settled in l
Slide 40: Robust growth in individual business
Robust growth in individual business Figures in Rs Crore Ind. FYP Market share maintained Strong growth in Renewal Premium 4,353 1,693 1,702 Renewal Premium 3,594 Individual FYP1 3,240 1,059 FY18 FY19 FY20 FY18 FY19 FY20 Ind. FYP1 (YTD – Feb’20) was up 10% y-o-y Renewal Premium (YTD – Feb’20) was up
Slide 41: Focus on value accretive product mix
Focus on value accretive product mix Figures in Rs Crore Improvement in Product Mix Improvement in VNB Margins1 5% 6% 6% Gross VNB Net VNB Protection GSec 7.4% 7.3% 6.1% 32% 33% 4.3% 9.8% 6.9% 42% Non-Par 32.9% 34.6% 33.8% Margin 23% Par 608 586 24% 20% 179 ULIP 388 125 39% 37% 32% 50 FY18 FY19 FY20
Slide 42: Multi channel distribution strategy
Multi channel distribution strategy Figures in Rs Crore Sourcing Mix Proprietary channel driving margin improvement Partnerships Proprietary Partnership Channel Proprietary Channel YTD Feb’20: 14% y-o-y YTD Feb’20: 6% y-o-y 24% 52% 54% Increase in 916 Ind. FYP 874 817 786 productivity in proprietary
Slide 43: Digitally enabled customer experience
Digitally enabled customer experience Distribution Contact Center mApp - Adoption @ 90% (LY 80%) IVR self service at 65% Vs. 46% in FY19 InstaVerify– adoption at 35%+ vs. 15% in LY Online payments at 15% vs. 7% in FY19 12% servicing through chatbot + WhatsApp Portal Chatbot + WA Portal transactions
Slide 44: Focus on quality of business
Focus on quality of business Figures in Rs Crore Improvement in persistency and reduction in surrenders Consistent growth in AUM: 2 year CAGR ~6% 83% FY19 FY20 78% 40,442 41,126 36,867 Persistency1 66% 68% AUM 58% 57% 54% 53% 49% 45% 13th month 25th month 37th month 49th month 61st month FY18 FY19 F
Slide 45: MCEV growth with RoEV of 13.2%
MCEV growth with RoEV of 13.2% Figures in Rs Crore Embedded Value Sensitivity Table Scenarios % Δ in IEV % Δ Gross VNB Reference Rates and Assets Increase of 100 bps in the reference rates 4.6% 16.8% Decrease of 100 bps in the reference rates (5.5%) (21.0%) Policy/premium discontinuance rates (propo
Slide 46: 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 18-19 FY 19-20 Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) (PY) (CY) 691 542 Individual First year Premium 1,798 1,804 540 596 Group First year Premium 2,119 1,854 16% 1,347 1,5
Slide 47: Aditya Birla Health Insurance Limited
Aditya Birla Health Insurance Limited 46
Slide 48: Fastest Growing health Insurance Company
Fastest Growing health Insurance Company Strong GWP growth led by Retail ABHI’s position of strength Figures in Rs Crore Growth Rate 1 Strong Distribution driving scale 76% 872 FY19 FY20 Comprehensive Suite of Digital & Virtual Assets 497 630 ABHI → 104% 76% 2 enabling end-to-end digital journeys 32
Slide 49: Strong distribution driving scale
Strong distribution driving scale Diversified & scaled Diversified distribution and scaled and distribution provider and providernetwork network Digitally enabled acquisition and onboarding FY19 FY20 Digital Platforms enabling multi-channel sale Branches 59 76 Digital Onboarding & training for advis
Slide 50: Suite of Digital Assets enabling end-to-end digital journeys
Suite of Digital Assets enabling end-to-end digital journeys Comprehensive suite of Digital & Virtual assets End-to-end digitally enabled journeys Distributor Enablement Customer Servicing & ➢ ~90% processes online ➢ Multi-lingual chat-bot Engagement Servicing & Claims ➢ Claims tracking in app ➢ Wha
Slide 51: Comprehensive Product Suite
Comprehensive Product Suite Large & diversified product suite enabling traditional & non-traditional customer acquisition Expanding the Market Comprehensive Product Suite Product Portfolio Younger customer base (<30 years) Activ Health / Assure: Industry 1st incentivized wellness product COVID Cover
Slide 52: Driving customer engagement through health management
Driving customer engagement through health management Health Data Risk Stratification Interventions Engagement Outcomes2 Very High Risk ✓ 2nd opinion Leveraging Health ecosystem for Compliance /Health Risk Customer Profile & Critical condition ✓ Health coach improved sourcing & higher engagement P
Slide 53: Business Outcomes
Business Outcomes Figures in Rs Crore GWP grew 76% YoY with 2x retail growth 5.2 Mn. through rural & micro/ byte-sized products Lives Covered (Mn) 3.6x 872 8.3x 8.3 Revenue 497 630 Retail 243 325 2.3 89 1.0 154 172 242 Group FY18 FY19 FY20 FY18 FY19 FY20 Holistic health risk management On track for
Slide 54: Key Financials – Aditya Birla Health Insurance Limited
Key Financials – Aditya Birla Health Insurance Limited Quarter 4 Figures in Rs Crore Full Year ∆ LY% FY 18-19 FY 19-20 Key Performance Parameters1 FY 18-19 FY 19-20 (PY) (CY) (PY) (CY) 123 245 Retail Premium 325 630 ~2x 58 81 Group Premium 172 242 181 326 Gross Written Premium 497 872 ~1.8x 181 296
Slide 55: Other Financial Services businesses
Other Financial Services businesses
Slide 56: Other Financial Services Businesses
Other Financial Services Businesses Quarter 4 Figures in Rs Crore Full Year FY 18-19 FY 19-20 Key Performance Parameters FY 18-19 FY 19-20 (PY) (CY) Other Financial Services Businesses1 (PY) (CY) 155 188 Aggregate Revenue 641 743 (9) 14 Aggregate Profit Before Tax (16) 58 • Premium placement grew y-
Slide 57: Annexure A Consolidated Financials
Annexure A Consolidated Financials
Slide 58: Consolidated Profit & Loss
Consolidated Profit & Loss Figures in Rs Crore Quarter 4 Figures in Rs Crore Full Year ∆ LY% FY 18-19 FY 19-20 Consolidated Profit & Loss FY 18-19 FY 19-20 (PY) (CY) (PY) (CY) 4,730 4,845 Revenue 15,164 16,792 11% 342 78 Profit Before Tax (before share of profit/(loss) of JVs 1,155 1,029 67 50 Add:
Slide 59: A financial services conglomerate meeting the life time needs of its customers
A financial services conglomerate meeting the life time needs of its customers Life Insurance Mutual Funds Home Finance Online Personal Finance Health Insurance Wealth Management Personal Finance Management Motor Insurance Stocks and Securities SME Finance Money for Life Planner Corp General Insuran
Slide 60: 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