COL Financial Group, Inc. · PSE:COL
COL Financial — 9M2013 Earnings Presentation
38 slides from COL Financial's earnings presentation, November 2013
Slide 1: In the Business of Trust. 9M13 Results
IN THE BUSINESS OF TRUST. 9M13 RESULTS COL FINANCIAL Pi ealep ee Nees
Slide 2: Investor Presentation Highlights
INVESTOR PRESENTATION HIGHLIGHTS COMPANY OVERVIEW FINANCIAL & OPERATING HIGHLIGHTS GROWTH OUTLOOK 2
Slide 3: Company Overview
COMPANY OVERVIEW Established and licensed by the SEC in 1999 The leading and fastest-growing online stockbroker in the Philippines Focused on tapping the underserved retail investor base in the stock market Founder (Edward K. Lee) retains 19.5% stake and actively manages the Company. COL FINANCIAL G
Slide 4: Ownership Structure
OWNERSHIP STRUCTURE EDWARD K. LEE 19.5% PUBLIC 44.7% 13.4% ALEXANDER L. YU 22.5% Outstanding Shares 468.7Mil Free Float 209.4Mil OTHER DIRECTORS & OFFICER Market Cap* Php8.0Bil *As of end of September 2013 4
Slide 5: Business Objective
BUSINESS OBJECTIVE To be the preferred source of financial services, a trusted provider of guidance and investment and a strong organization committed to delivering great value to its customers. “ Our goal is to be Champion of the Filipino Investor ” COL FINANCIAL GROUP, INC. 9M13 RESULTS 5
Slide 6: Leading and Fastest Growing Online Stockbroker in the Philippines
LEADING AND FASTEST GROWING ONLINE STOCKBROKER IN THE PHILIPPINES IN TERMS OF NUMBER OF ACCOUNTS 2012 Total Accounts % of Total Broker Name % Change Rank 2011 2012 Accounts Online 1 COL Financial 27,969 46,444 66.1% 59.4% 2 BPI Securities 16,543 19,721 19.2% 25.2% 3 First Metro 4,217 6,638 57.4% 8.5
Slide 7: Leading and Fastest Growing Online Stockbroker in the Philippines
LEADING AND FASTEST GROWING ONLINE STOCKBROKER IN THE PHILIPPINES IN TERMS OF NUMBER OF ACCOUNTS Rank Value TO (PhpBil) % of No. of Trades (’000) Online No. of Online Value No. of Broker Name % % 2011 2012 Value 2011 2012 Transactions TO Trades Change TO Change 1 1 COL Financial 121.9 150.4 23.3% 76
Slide 8: Also Amongst the Biggest Philippine-Based Brokers
ALSO AMONGST THE BIGGEST PHILIPPINE-BASED BROKERS 2011 2012 Value Broker Name % Change 2012 % Total Rank Rank Turnover 2 1 Deutsche Regis Partners Inc. 382,244 10.80 2 4 2 UBS Securities Phil. 355,272 10.03 4 3 3 CLSA Phils. Inc 304,177 8.58 3 1 4 Maybank ATR KimEng Securities, Inc. 259,447 7.32 1 5
Slide 9: Corporate Milestones
CORPORATE MILESTONES COL FINANCIAL GROUP, INC. 9M13 RESULTS 9
Slide 10: Bulk of Revenues Generated from Philippine Operations
BULK OF REVENUES GENERATED FROM PHILIPPINE OPERATIONS 0.0% COL’s Philippine operations REVENUE BREAKDOWN account for 94.2% of revenues, 25.1% Others while its HK operations account for Interest the balance. 5.8% HK Com PH Com - Agency & Advisory Commissions from both Philippines 28.0% and HK account
Slide 11: Financial & Operating Highlights
INVESTOR PRESENTATION HIGHLIGHTS COMPANY OVERVIEW FINANCIAL & OPERATING HIGHLIGHTS GROWTH OUTLOOK 11
Slide 12: Key Highlights
KEY HIGHLIGHTS POSITIVE NEGATIVE • Profits up 11.4% driven by • HK revenues down Y/Y double digit growth in revenues • Philippine operating profits at record high, exceeding full year total for 2011 • Strong growth in new accounts and net new asset flows • Increased market share in terms of local va
Slide 13: 9M13 Net Income Up by 11.4%
Consolidated Income Statement (in PhpMil) Change 9M12 9M13 Amount % 9M13 NET INCOME INCOME UP BY 11.4% Commissions Interest 344.5 137.7 452.0 151.5 107.4 13.8 31.2% 10.0% Other income 2.3 0.3 -2.0 -87.2% Consolidated net income rose 11.4% Y/Y Total 484.5 603.7 119.3 24.6% to Php297.0 Mil. Pre-tax pr
Slide 14: Philippine Drives Revenue Growth
Revenue Breakdown (in PhpMil) Change 9M12 9M13 Amount PHILIPPINE DRIVES Philippines REVENUE GROWTH Commission Self-directed 300.6 201.1 417.0 248.0 116.4 46.9 Agency & advisory 99.5 169.0 69.5 Revenues rose by 24.6% to Php603.7 Interest 137.7 151.5 13.8 Mil driven by the 29.2% growth in Others 1.5 -
Slide 15: Philippine Drives Revenue Growth
Revenue Breakdown (in PhpMil) Change 9M12 9M13 Amount PHILIPPINE DRIVES Philippines REVENUE GROWTH Commission Self-directed 300.6 201.1 417.0 248.0 116.4 46.9 Agency & advisory 99.5 169.0 69.5 Interest 137.7 151.5 13.8 Others 1.5 -0.3 -1.8 Philippine Revenues 439.8 568.2 128.4 Commission from HK fel
Slide 16: Philippine Commissions Account for a Growing Share of Revenues
PHILIPPINE COMMISSIONS ACCOUNT FOR A GROWING SHARE OF REVENUES 0.3% 0.0% REVENUE BREAKDOWN 28.5% 25.1% Others 5.8% Interest 9.1% HK Com PH Com - Agency & Advisory 28.0% 20.6% PH Com - Self-directed 41.6% 41.1% 9M12 9M13 16
Slide 17: ROAE Improved to 30.8%
ROAE IMPROVED TO 30.8% Selected Financial Indicators Operating profits rose by 26.9% to Php366.8 Mil despite the continuous Change 9M12 9M13 weakness of HK as the Philippines Amount % accounted for a larger share of Operating Profits operations. Philippines 269.9 351.7 81.8 30.3% Hong Kong 19.2 15.3
Slide 18: ROAE Improved to 30.8%
ROAE IMPROVED TO 30.8% Selected Financial Indicators Change 9M12 9M13 Amount % ROAE improved to 30.8% from 23.3%. Operating Profits Aside from the growth in profits, COL Philippines 269.9 351.7 81.8 30.3% benefited from increased leverage as Hong Kong 19.2 15.3 -3.9 -20.5% its asset base continued t
Slide 19: Expenses Remained in Check
EXPENSES REMAINED IN CHECK Breakdown of Expenses Total expenses grew by only 15.4% to Php239.5 Mil as fixed operating Change 9M12 9M13 expenses fell. Amount % Trading Related Expenses Trading related expenses jumped by Commission expenses 61.4 96.2 34.8 56.8% 53.1% to Php113.5 Mil as value of Stock
Slide 20: Strong and Highly Liquid Balance Sheet
STRONG AND HIGHLY LIQUID BALANCE SHEET Consolidated Balance Sheet (In PhpMil) COL's balance sheet remained strong, Change with high levels of cash and no debts. 12/31/12 9/30/13 Amount % Total assets grew by 26.4% for the year ASSETS to date period to Php5.3 Bil largely Cash & equivalents 2,647.3 3,
Slide 21: Strong and Highly Liquid Balance Sheet
STRONG AND HIGHLY LIQUID BALANCE SHEET Consolidated Balance Sheet (In PhpMil) Change 12/31/12 9/30/13 Amount % Stockholders’ equity and book value ASSETS per share were flat as bulk of profits Cash & equivalents 2,647.3 3,903.7 1,256.4 47.5% from Philippine operations last year Receivables 1,444.3 1
Slide 22: Sustained Customer Growth
SUSTAINED CUSTOMER GROWTH CLIENT BASE +83.6% COL’s client base grew by 83.6% Y/Y to 77,466 as of end September 2013. 77,466 Average monthly additions accelerated to 3,437 clients during 9M13 from 1,570 clients during 9M12 and 1,539 clients in 2012. 46,536 42,190 28,067 15,345 8,716 6,309 2008 2009 2
Slide 23: Sustained Customer Growth
SUSTAINED CUSTOMER GROWTH CLIENT EQUITY (PHPMIL) +49.1% Client equity grew by 49.1% Y/Y to 47,101 Php47.1 Bil. Compared to end September 2012, net 34,359 new flow of clients reached Php18.2 Bil. 31,595 For 9M13 alone, net new flows reached a record amount of Php16.0 Bil. 16,447 11,962 5,122 2,128 20
Slide 24: Margin Loans Continued to Recover
MARGIN LOANS CONTINUED TO RECOVER +30.6% Average daily margin loans increased by AVE DAILY MARGIN LOANS 30.6% Y/Y to Php1.2 Bil. 1,220 1,102 As of end September 2013, the total number of approved margin accounts 952 934 reached 1,047, up 17.6% Y/Y. Meanwhile, 34.8% of approved margin 573 accounts ut
Slide 25: Market Share Further Improved
MARKET SHARE FURTHER IMPROVED COL’s average daily turnover grew by 39.2% Y/Y to Comparative Performance (COL Vs. PSE) Php839.5 Mil. 9M12 9M13 Amount % Although this is slower compared to the 54.0% growth PSE Ave. Daily T/O in the average daily turnover of the PSE, this is still (PhpMil) 7,068.4 10,8
Slide 26: Growth Outlook
INVESTOR PRESENTATION HIGHLIGHTS COMPANY OVERVIEW FINANCIAL & OPERATING HIGHLIGHTS GROWTH OUTLOOK 26
Slide 27: Equity Investments in an Expansion Phase
EQUITY INVESTMENTS IN AN EXPANSION PHASE TOTAL CIS IN THE PHILIPPINES 352 Total investments in CIS have increased by (IN PHP BIL) a CAGR of 23.7% from 2008 to 2012. Growth was driven by the 23.0% and 24.9% MUTUAL FUNDS CAGR of investments in UITFs and mutual UITFS 250 funds. TOTAL CIS 224 206 TOTAL
Slide 28: Equity Investments in an Expansion Phase
EQUITY INVESTMENTS IN AN EXPANSION PHASE Value turnover in the PSE also increased by a CAGR of 23.6% from 2008 to 2012. PSE VALUE TURNOVER (IN PHP BIL) Growth in value turnover of local investors (24.8% CAGR) outpaced that of foreign 806.4 investors (22.3% CAGR). 538.3 Local Foreign Total 457.3 Valu
Slide 29: Driven by Low Interest Rates
DRIVEN BY LOW INTEREST RATES 6.0 SDA RATE & T-BILL RATE Interest rates are on a downtrend, with 5.7 the average SDA and 91-day T-bill rates falling from 5.7% in 2008 to 2.3% and 0.9% 5.0 during the first ten months of 2013. The drop in interest rates was driven by 4.0 improving government finances,
Slide 30: Removal of Non-Trust Entities' Access to SDA
REMOVAL OF NON-TRUST ENTITIES’ ACCESS TO SDA TO ACT AS A CATALYST FOR MORE EQUITY INVESTMENTS The central bank recently issued a 2.5 FUNDS PARKED IN SDA circular removing access to SDA among (IN PHP TRIL) non-trust entities effective November 2.0 2013, beginning with a 30% reduction by end July. 1.5
Slide 31: Removal of Non-Trust Entities' Access to SDA
REMOVAL OF NON-TRUST ENTITIES’ ACCESS TO SDA TO ACT AS A CATALYST FOR MORE EQUITY INVESTMENTS SDA RATE VS. FUND FLOWS (IN PHP MIL) Mutual Fund Fund flows into managed accounts grew Ave. SDA Net Sale Date as a result of falling SDA rates. Rate Equity Bond Others Total While fund flows turned negative
Slide 32: Growth Potential Remains Significant
GROWTH POTENTIAL REMAINS SIGNIFICANT In the Philippines, the amount invested in CIS only represents 5.9% of total deposits. 50.00% Meanwhile, based on the number of retail RETAIL ACCOUNTS AS accounts as a percentage of the population % OF POPULATION only 0.55% of the population is currently 35.70% i
Slide 33: Online Brokerage Business in a Secular Uptrend
ONLINE BROKERAGE BUSINESS IN A SECULAR UPTREND Market share of online brokers in terms SHARE OF ONLINE BROKERS 14.9% of client base grew from 4.3% in 2008 to CLIENT BASE 14.9% in 2012. VALUE TURNOVER Market share in terms of value turnover also grew from 2.0% in 2008 to 6.7% in 2012. 6.7% SHARE OF O
Slide 34: Online Brokerage Business in a Secular Uptrend
ONLINE BROKERAGE BUSINESS IN A SECULAR UPTREND INTERNET SUBSCRIBERS 3,242,800 2,803,924 Growth expected to continue, driven by growing number of internet subscribers in the country. 2,138,976 From 2008 to 2012, total number of 1,710,679 internet subscribers increased by a CAGR of 32.2%. 1,061,626 20
Slide 35: Highly Geared Towards the Expanding Retail Investors Base
HIGHLY GEARED TOWARDS THE EXPANDING RETAIL INVESTORS BASE CLIENT BASE 7% COL is currently the dominant market 9% leader among online stockbrokers in the COL Philippines in terms of number of clients BPI 25% and value turnover. FIRST METRO 59% OTHERS Market share has consistently increased since 2008
Slide 36: Highly Geared Towards the Expanding Retail Investors Base
HIGHLY GEARED TOWARDS THE EXPANDING RETAIL INVESTORS BASE The growth in COL’s market share is PHILIPPINES OPERATING clearly evident in the strong performance PERFORMANCE 593 of its Philippine operations. 568 541 REVENUES From 2008 to 2012, revenues from OPERATING INCOME 440 Philippines increased by
Slide 37: Growth Plans
GROWTH PLANS Leverage on Strong Brand Equity Offer more products • Offer flexible margin rate scheme • Distribute third party funds • Review other products and services that will cater to the growing needs of existing and new clients Expand market reach • Build investor centers in key business areas
Slide 38: Thank You.
THANK YOU. COL FINANCIAL COL FINANCIAL GROUP, INC. PHILIPPINES 9M13 RESULTS