Aditya Birla Capital Ltd. · NSE:ABCAPITAL
Aditya Birla Capital — Q3 FY2019 Earnings Presentation
47 slides from Aditya Birla Capital's earnings presentation, Feb 5, 2019
Slide 1: Financial Results Q3 FY18-19
Investor Presentation FINANCIAL RESULTS Q3 FY18-19 MUMBAI 5th February 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 - 40 3 | Consolidated Financials & Other Annexures Pg. 41 - 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: Q3 FY19: Key Highlights
Q3 FY19: Key Highlights Figures in Rs Crore PROTECTING INVESTING FINANCING 39% -1% 29% 2,62,223 2,58,833 1,998 60,129 1,434 46,522 Q3 FY18 Q3 FY19 Q3 FY18 Q3 FY19 Q3 FY18 Q3 FY19 Total Premium1 AAUM Lending Book5 1 | 79% Ind. FYP2 growth in Life Insurance, 1 | Domestic AAUM grew 1% y-o-y; Offshore/
Slide 4: Q3 FY19: Financial performance
Q3 FY19 : Financial performance Figures in Rs Crore Consolidated Revenue1 Consolidated PAT: Bridge from Q3 FY18 → Q3 FY19 HFC delivering strong 26% growth in profits 4,119 Established Businesses Reducing losses in grew 30% y-o-y Health Insurance 3,257 206 145 Q3 FY18 Q3 FY19 Profit After Tax (After
Slide 5: Consolidated PAT Reconciliation (IGAAP Vs. Ind AS)
Consolidated PAT Reconciliation (IGAAP Vs. Ind AS) Figures in Rs Crore Figures in Rs Crore Q2 FY19 Q3 FY19 PAT after MI (As per IGAAP) 227 239 EIR on assets and liabilities (15) (15) ECL methodology adoption 1 (18) MTM/ Fair Valuation (25) 4 Non-controlling interest adj. on above 21 8 Group share on
Slide 6: Aggregate PBT
Aggregate PBT ∆ LY% Quarter 3 Figures in Rs Crore Nine Months ∆ LY% FY 17-18 FY 18-19 FY 17-18 FY 18-19 Businesses (Aggregated on 100% basis) (PY) (CY) (PY) (CY) 265 323 NBFC 770 975 126 166 Asset Management 372 467 69 33 Life Insurance 163 79 10 32 Housing 21 67 8 4 General Insurance Broking 38 27
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 Diversified loan book with focus on Loan book 39,770 49,301 growth in higher margin segments shift towards 4% 2% SME + Retail + HNI mix grew by 38% y-o-y value 49% 52% accretive segm
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 (26% of Loan Book) Retail (13% of Loan Book) HNI + Others (12% of Loan Book) 4% 3% 7% 16% 14% 13% 11% 30% 26% 26% 36% 54% 22% 21% 86% 70% 48% 39% 35% 39% Q3 F Y 1 8 Q3 FY 1 9 Q3 FY 1 8 Q3 FY 1 9 Q3 F Y 1 8 Q3 F Y 1 9 Bro
Slide 10: 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 (49% of Loan Book) Typical Nature of Transactions % of Loan Book (Rs Crore) TL/WCDL ▪ Appraisal based on business cash flows along with ~55 collaterals to diversified industries 20% 39% 41%
Slide 11: Strong focus on growth and quality of loan book
Strong focus on growth and quality of loan book Figures in Rs Crore Delivered consistent loan book growth CAGR 32% 49,301 while maintaining strong asset quality 43,242 34,703 Loan Book Growth 25,755 Diversified loan book with ATS of Rs 36 Lacs 17,588 FY'15 FY'16 FY'17 FY'18 9M FY19 Secured loan book
Slide 12: Stable margins across interest rate cycles
Stable margins across interest rate cycles Cost of Borrowing Optimised borrowing cost in a hardening interest rate environment 8.4% 8.3% Cost of 8.2% 8.0% 8.0% 7.8% 7.8% 7.8% 7.8% Borrowing across interest rate cycles Maintaining margins through interest rate cycles Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY17 F
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% Bank 82% 75% Term Loan 40% 54% 31% 40% 41% NCD 35% Mutual Fund 16% 14% 24% 18% CP < 3
Slide 14: Key Financials – Aditya Birla Finance Limited
Key Financials – Aditya Birla Finance Limited ∆ LY% Quarter 3 Figures in Rs Crore Nine Months ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 39,770 49,301 Lending book 39,770 49,301 24% +90 bps 11.20% 12.09% Average yield 11.36% 11.81% 6.72% 7.25% Interest c
Slide 15: Aditya Birla Housing Finance Limited
Aditya Birla Housing Finance Limited 15
Slide 16: Value accretive growth
Value accretive growth Figures in Rs Crore Lending book grew 60% y-o-y 10,828 Affordable book at Rs 1,176 Crore (grew 27% q-o-q) Strong growth 6,752 in Lending Book Q3 FY18 Q3 FY19 Improvement in Cost Income Ratio Mainly led by scale and operating efficiency 74% Improvement 59% in Cost Income Ratio
Slide 17: Diversified product portfolio
Diversified product portfolio Segment Mix (%) Margin accretive customer mix 2% 12% 11% 7% Home Loans 28% 28% 23% Non-Salaried 56% LAP CF 59% Salaried 72% 58% Affordable 44% Q3 FY18 Q3 FY19 Home Loans Affordable ATS: Rs 58 Lacs (LY: Rs 89 Lacs) Contractual tenor (HL) of 18 years LAP Expected actuaria
Slide 18: Pan India distribution network
Pan India distribution network Stable Geographic Mix (%) Focus on increasing reach and building retail granularity # of Operational Branches 68 38% 39% 15% 13% 44 18% 19% 29% 29% Q3 FY18 Q3 FY19 Q3 FY18 Q3 FY19 North South East West Direct sourcing ramped up to 52% (PY: 47%) Balanced distribution st
Slide 19: Maintaining margins through interest rate cycles
Maintaining margins through interest rate cycles 8.3% Optimised borrowing cost in a hardening 8.0% 7.9% interest rate environment Cost of Borrowing Maintained margins across interest rate cycles Q1 FY19 Q2 FY19 Q3 FY19 Yield NIM (incl. Fees) Demonstrating ability to successfully pass 9.7% 10.0% 10.4
Slide 20: 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% 84% Bank 84% 65% Term Loan 77% 22% 27% 26% NCD 11% Mutual Fund 12% 20% 7% 8% CP 7% Insurance 3
Slide 21: Key Financials – Aditya Birla Housing Finance Limited
Key Financials – Aditya Birla Housing Finance Limited ∆ LY% Quarter 3 Figures in Rs Crore Nine Months ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) > 1.5x 6,752 10,828 Lending book 6,752 10,828 > 1.5x 9.86% 10.38% Average yield 10.01% 10.05% 6.79% 7.35% Int
Slide 22: Aditya Birla Sun Life AMC Limited
Aditya Birla Sun Life AMC Limited 22
Slide 23: Profitable growth aided by improvement in asset mix
Profitable growth aided by improvement in asset mix Figures in Rs Crore 2,62,223 Domestic Equity AAUM grew by 8% y-o-y 2,58,833 9,925 7,712 2 year CAGR in line with industry growth1 (ex-ETF): 1,94,925 ▪ Overall AUM: Industry: 16% | ABSLAMC: 16% 6,626 ▪ Domestic Equity: Industry: 36% | ABLSAMC: 41% 1
Slide 24: Continued focus on retail expansion
Continued focus on retail expansion Figures in Rs Crore Retail + HNI AUM1 at Rs 1,20,000+ Crore Increasing HNI 1.6x 1,23,024 Retail 1,13,445 Grew ~1.6x over 2 years Retail 75,056 71,370 73,359 Penetration 50,879 (AUM) 24,177 42,075 49,665 Investor folios up ~2x in 2 years Dec'16 Dec'17 Dec'18 0.9 mi
Slide 25: Balanced Distribution Network
Balanced Distribution Network Overall AAUM Sourcing Mix (%) Continue to strengthen distribution network Target to reach 275+ locations by FY19 269 > 75% of locations in B-30 cities; Plan to further 44% 40% Locations expand in B-30 cities 16% 17% 11% 17% 88 Increasing presence through tie-ups with PS
Slide 26: Building scale across digital assets
Building scale across digital assets Continue to grow Digital penetration SIPNOW - Robo advisory website Digital Transactions as % of Total State-of-the-art technology to provide access to a host of Transactions & services—anytime, anywhere! 78% 54% Dedicated mobile application for distributors Mobi
Slide 27: Key Financials – Aditya Birla Sun Life AMC Limited
Key Financials – Aditya Birla Sun Life AMC Limited ∆ LY% Quarter 3 Figures in Rs Crore Nine Months ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 2,41,107 2,42,344 Domestic AAUM 2,23,824 2,48,607 11% 8% 79,985 86,748 Domestic Equity AAUM 69,489 88,919 28% 11
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 (YTD) grew by 68% y-o-y 1,039 Significantly higher than industry growth Industry: 8% | Private2: 11% | Top 4 Private2: 8% 618 Individual 524 FYP1 Growth Q3 FY19 Ind. FYP grew 79% y-o-y Group FYP (YTD) grew by
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 5% 7% 30.3% 34.1% Gross VNB grew ~2x y-o-y Protection 366 Gross VNB 32% 33% Non-Par 196 Net VNB Margin for Q3 FY19 at 5.2% Q2 FY19 Net VNB Margin 2.5% Par 28% 23% U
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 531 508 partnerships channel 479 Channel-wise Individual FYP 139 Balanced distribution mix 9M FY18 9M FY19 9M FY18 9M FY19 Partnerships con
Slide 32: Focus on quality of business
Focus on quality of business Persistency Ratios1 Surrender Ratio1 +4% +5% +4% 75% 71% 72% 13.6% 13.3% 63% 64% 59% 57% 52% 54% 9.5% 13th month 25th month 37th month 9M FY17 9M FY18 9M FY19 9M FY17 9M FY18 9M FY19 Surrenders as % of Policyholder AUM Quality growth reflected by consistent improvement i
Slide 33: Key Financials – Aditya Birla Sun Life Insurance Limited
Key Financials – Aditya Birla Sun Life Insurance Limited ∆ LY% Quarter 3 Figures in Rs Crore Nine Months ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 68% 285 480 Individual First year Premium 661 1,107 67% 77% 299 530 Group First year Premium 1,038 1,579 5
Slide 34: Aditya Birla Health Insurance Limited
Aditya Birla Health Insurance Limited 34
Slide 35: Strong growth led by retail
Strong growth led by retail Figures in Rs Crore GWP grew ~2x with 1.3 Mn lives covered 316 Retail GWP Mix: 60% (PY: 21%) Strong GWP 126 Group 172 growth led by Retail 136 189 Retail 36 Rapid distribution capacity build up 9M FY18 9M FY19 100% Focus on Focus on improving claims experience improving 7
Slide 36: Significantly scaled up distribution and provider network
Significantly scaled up distribution and provider network One of the largest 3rd party distribution capacities Q3 FY18 Q3 FY19 9 Banca tie-ups within 2 years of operation : Branches ▪ HDFC, DCB, RBL, Deutsche Bank, AU Bank, KVB, SVC and AB 58 59 Payment Bank; ▪ Citi Bank signed, to go live in Q4 FY1
Slide 37: Driving value through diversification
Driving value through diversification Retail % of Total GWP Improving margins by increasing retail mix ~10x 60% Retail GWP mix grew 3x y-o-y to reach 60% Increasing contribution 34% of Retail GWP 6% FY 17 FY 18 9M FY19 Presence across 41 cities through 59 27% ~4x 35% Geographical branches and 650+ l
Slide 38: Key Financials – Aditya Birla Health Insurance Limited
Key Financials – Aditya Birla Health Insurance Limited Quarter 3 Figures in Rs Crore Nine Months ∆ LY% FY 17-18 FY 18-19 Key Performance Parameters1 FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 25 81 Retail Premium 36 189 7x 51 57 Group Premium 136 126 76 139 Gross Written Premium 172 316 2x 77 140 Revenue
Slide 39: Other Financial Services businesses
Other Financial Services businesses
Slide 40: Other Financial Services Businesses
Other Financial Services Businesses Quarter 3 Figures in Rs Crore Nine Months FY 17-18 FY 18-19 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) For Other Financial Services Businesses1 (PY) (CY) 125 160 Aggregate Revenue 302 481 (3) (5) Aggregate Profit Before Tax 8 (1) • Premium placement gr
Slide 41: Annexure A Consolidated Financials
Annexure A Consolidated Financials
Slide 42: Consolidated Profit & Loss
Consolidated Profit & Loss Figures in Rs Crore Quarter 3 Figures in Rs Crore Nine Months ∆ LY% FY 17-18 FY 18-19 Consolidated Profit & Loss FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 29% 2,927 3,780 Revenue 7,946 10,433 31% 212 283 Profit Before Tax (before share of profit/(loss) of JVs 760 823 44 55 Add
Slide 43: Annexure B Structure
ADITYA BIRLA CAPITAL adityabirlacapital.com Annexure B Structure
Slide 44: A financial services conglomerate meeting the lifetime needs of its customers
A financial services conglomerate meeting the lifetime needs of its customers Aditya Birla Capital Ltd. Listed NBFC ADITYA BIRLA FINANCE LTD 100% 74% ADITYA BIRLA MONEY LTD Stock & Securities Housing Finance ADITYA BIRLA HOUSING FINANCE LTD 100% 50.01% ADITYA BIRLA INSURANCE BROKERS LTD 2 Insurance
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
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