Aeon Credit Service (m) Bhd. · MYX:AEONCR
Aeon Credit Service (m) Bhd — Q2 FYE23 Earnings Presentation
29 slides from Aeon Credit Service (m) Bhd's earnings presentation, Sep 29, 2022
Slide 1: Q2 / 1H FYE23 Financial Results
Q2 / 1H FYE23 Financial Results 29 September 2022
Slide 2: Disclaimer
Disclaimer This document has been prepared by AEON Credit Service (M) Berhad (“AEON Credit” or the “Group”) solely for the use at the presentation to analyst, fund managers and investors. The information contained in this document has not been independently verified. No representation or warranty, w
Slide 3: Table of Contents
TABLE OF CONTENTS FINANCIAL OVERVIEW 04 KEY STRATEGIES AND 16 OPERATIONAL UPDATES APPENDIX 23
Slide 4: Financial Overview
yzoy) ALCON CREDIT SERVICE FINANCIAL OVERVIEW
Slide 5: Financial Performance
Financial Performance Steady asset growth momentum 1H FYE22 1H FYE23 YoY Revenue RM785.4M RM789.7M +0.5% PAT RM238.6M RM238.7M +0.1% Profitability ROE 26.0% 22.3% -3.7% Transaction & Financing Volume RM2.1B RM3.1B +46.4% Gross Financing Receivables RM9.6B RM10.4B +7.9% Loan Loss Coverage Ratio 343%
Slide 6: Income Statement
Income Statement Continuance of revenue growth trajectory underpinned by robust sales growth Total Transaction & Financing Volume (RM mil) Revenue (RM mil) 127.5% YoY 8.4% QoQ 6.6% YoY 2.2% QoQ 1,612.4 Increased QoQ Increased QoQ 800.0 1,700.000 1,486.7 sales driven by 700.0 mainly 1,500.000 Motorcy
Slide 7: Shareholder Value & Capital Management
Shareholder Value & Capital Management Supported by healthy financing receivables growth Gross Receivables (RM mil) Return On Asset (%) 7.9% YoY 3.8% QoQ 0.1% YoY 1.7% QoQ Strong pick up in ROA decreased 10,381.0 Personal 1.7% QoQ 9,996.5 Financing and resulted from Vehicle Financing lower annualise
Slide 8: Total Transaction & Financing Volume
Total Transaction & Financing Volume Marked increase in Total volume of 8.4% QoQ with strong pick up by Personal Financing Group 42.2% 27.6% 24.4% 14.0% 19.8% 25.4% 8.3% 30.8% 13.0% 31.3% 10.9% 20.0% Q2 9.8% Q1 Q2 FYE22 5.6% FYE23 5.8% FYE23 5.5% 3.0% 2.5% 0.1% Q2 Q1 Q2 2nd half year initiatives: Vo
Slide 9: Total Gross Financing Receivables
Total Gross Financing Receivables Improving QoQ for Key Segments; Personal Financing Group & Vehicle Financing Group 28.6% 27.7% 27.0% 25.5% 26.1% 26.5% 35.2% 35.4% 35.9% Q2 Q1 Q2 7.3% 6.8% 6.5% FYE22 3.2% FYE23 3.9% FYE23 4.0% 0.2% 0.1% 0.1% Q2 Q1 Q2 Marginally increased by 3.8% Volume (RM mil) QoQ
Slide 10: Receivables Collection
Receivables Collection Slow collection activities overwhelmed by turbulent external factors Receivables Collection Trend 97.8 97.7 97.3 95.6 82.4 78.2 78.8 79.1 76.9 72.1 69.4 68.9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FYE21 FYE22 FYE23 Current Collection Ratio - Not Past Due (%) D1 Collection Ratio - Past
Slide 11: Non-Performing Loan (NPL)
Non-Performing Loan (NPL) Continuous prudent approach on asset quality NPL Trend NPL Trend 2.53 2.91 1.95 2.24 Higher NPL QoQ due to: • Uptrend of NPL attributed to temporary extension of write off criteria between Jun’22 to Sep’22 • Unpaid account with status D7 to D9 amounted to RM70.7mil 10,259 9
Slide 12: Net Credit Cost (NCC)
Net Credit Cost (NCC) Higher NCC QoQ driven by higher impairment loss and lower bad debt recovered NCC Trend 5.55% Higher annualised NCC attributed 3.70% 2.35% to: 4.58% 1.50% • Year to date impact due to change in ECL ratio 1.75% 0.80% -0.72% • Higher year to date receivables movement of RM523.6mil
Slide 13: Impairment Loss (IL) Analysis
Impairment Loss (IL) Analysis Higher IL QoQ attributed by higher existing delinquent receivables & lower write back on management overlay 417% 343% 281% 276% Higher Expected Credit Loss (ECL) provision QoQ mainly due to: 18 121 74 • Current and delinquent account 74 81 38 29 IL movement of RM81.4mil
Slide 14: Cost-to-Income Ratio (CIR)
Cost-to-Income Ratio (CIR) Operational efficiency (excluded IL) improved QoQ and YoY due to prudent cost management Q2 Q2 1H 1H RM mil YoY YoY FYE22 FYE23 FYE22 FYE23 Total Operating Income 413.0 447.0 8.2% 873.2 896.3 2.6% Personnel Expenses 54.2 52.5 -3.1% 109.6 95.7 -12.7% Advertisement & Promoti
Slide 15: Dividend
Dividend Declared interim dividend of 28.50 sen for FYE2023, translating into dividend payout of 30.5% Historical Dividend Data 500.0 33.9% 35.0% 31.5% 31.5% 31.9% 30.5% 400.0 30.0% 300.0 25.0% 200.0 20.0% 100.0 15.0% 111.9 354.6 91.9 292.0 74.6 234.0 123.8 365.4 72.8 238.7 - 10.0% FYE19 FYE20 FYE21
Slide 16: Key Strategies and Operational Updates
KEY STRATEGIES and OPERATIONAL UPDATES
Slide 17: FYE2023 Indicator
FYE2023 Indicator Indicators Actual Remark FYE2023 Q2FYE23 • Higher loan growth driven by higher demand and application of financing in the market Loan Growth > 10% 7.9% • Accelerate products roll outs on digital platform to increase market penetration • Driven by higher operating income and lower t
Slide 18: Digitizing The Customers Journey on Product Onboarding
Digitizing The Customers Journey on Product Onboarding ESG In Progress Initiative 2019 2023 2022 Q3 Q4 Q1 Q2 Traditional Approach Preliminary Loan Assessment Go Paperless Instant Approval Extension of Digital 1 Real time conditional Application Channel 1 Manual KYC approved credit limit 1 e-Mandate
Slide 19: New AEON App Road Map
New AEON App Road Map Target to complete by Feb 2024 October’22 launch AEON 1st E-WALLET E-WALLET & iAEON NEW AEON APP (AEON Credit Customer) • Only a touch point by AMPs • Expand AEON Member base • Touch point for all AEON Credit Customer • Only can make payment to AEON from iAEON • Customer engage
Slide 20: Digital Bank Timeline for FYE2022-2023
DIGITAL BANK TIMELINE FOR FYE2022-2023 Launch within 24 months from 8 April 2022 Milestone 1 Milestone 2 Milestone 3 Obtained Establish Commence Digital Bank Digital Bank Operations licence on 29 April Project Preparation Project Kick-off Apr’22 MAY’22 JUN’22 JUL’22 AUG’22 SEP’22 OCT’22 NOV’22 DEC’2
Slide 21: Sustainability Implementation
Sustainability Implementation Management Sustainability Committee formed in Nov 2021 to further strengthen and oversee the matters relating to sustainability within the Group. ESG Achievement We appointed Sustainability consultant to assist AEON Credit to expedite sustainability implementations. to-
Slide 22: Corporate Social Responsibility – Q2 FYE23
Corporate Social Responsibility – Q2 FYE23 Corporate social responsibility activities with local community Nationwide Coastal Cleanup at 6 Malaysia AEON Foundation Mesra AMP Privilege Card Handover by Prime Locations (in-conjunction with World Aidiladha Donation at 4 Locations Minister to 10 Pilot C
Slide 23: Appendix
yzoy) ALCON CREDIT SERVICE APPENDIX
Slide 24: Performance Highlights
Performance Highlights Q2 Q1 Q2 1H 1H (RM mil) QoQ YoY YoY FYE22 FYE23 FYE23 FYE22 FYE23 Total Transaction & Financing 708.8 1,486.7 1,612.4 8.4% 127.5% 2,116.9 3,099.1 46.4% Volume Credit Card 299.1 410.0 394.3 -3.9% 31.8% 679.9 804.3 18.3% Easy Payment Financing 270.8 737.6 767.9 4.1% 183.5% 948.8
Slide 25: Financial Summary
Financial Summary Q2 Q1 Q2 (RM mil) QoQ YoY FYE22 FYE23 FYE23 Credit Card 706.6 676.1 675.1 -0.2% -4.5% Card Purchase 688.5 656.9 652.6 -0.7% -5.2% Cash Advance 18.1 19.2 22.5 17.0% 24.1% Personal Financing 2,450.0 2,604.7 2,745.9 5.4% 12.1% Objective Financing 307.6 390.8 418.4 7.1% 36.0% Motorcycl
Slide 26: Operating Income
Operating Income Q2 Q1 Q2 1H 1H (RM mil) QoQ YoY YoY FYE22 FYE23 FYE23 FYE22 FYE23 Credit Card 30.6 35.3 36.2 2.2% 18.4% 64.5 71.6 11.1% Personal Financing 103.0 102.8 106.9 4.0% 3.8% 217.5 209.7 -3.6% Objective Financing 17.8 21.7 22.3 2.6% 25.1% 35.6 43.9 23.4% Motorcycle Financing 139.4 144.6 148
Slide 27: Total Expenses
Total Expenses Q2 Q1 Q2 1H 1H (RM mil) QoQ YoY YoY FYE22 FYE23 FYE23 FYE22 FYE23 Impairment Loss on Receivables 92.3 37.3 150.0 302.3% 62.5% 115.5 187.2 62.1% Personnel Expenses 54.2 43.1 52.5 21.7% -3.1% 109.6 95.7 -12.7% Advertisement & Promotion (A&P) 10.5 8.3 5.8 -30.1% -44.5% 21.3 14.2 -33.5% O
Slide 28: Financial Indicators
Financial Indicators Q1 Q2 1H FYE20 FYE21 FYE22 FYE23 FYE23 FYE23 PBT (RM mil) 390.4 324.9 526.8 215.5 100.0 315.6 PAT (RM mil) 292.0 234.0 365.4 163.1 75.6 238.7 Weighted average no. of ordinary shares (mil) 255.3 255.3 255.3 255.3 255.3 255.3 Basic EPS (RM)* 1.07 0.88 1.39 2.5 1.9 1.9 NTA per shar
Slide 29: Thank You
THANK YOU Mr Lee Kit Seong Ms Lee Siew Tee Investor Relations Team Chief Corporate Officer Chief Financial Officer ir_info@aeoncredit.com.my leeks@aeoncredit.com.my stlee@aeoncredit.com.my Level 18, UOA Corporate Tower, www.aeoncredit.com.my Avenue 10, The Vertical, 03-2772 9000 Bangsar South City,
AEON Credit Service (M) Berhad — Q2 FYE23 Earnings Presentation on 6ix