Aditya Birla Capital Ltd. · NSE:ABCAPITAL
Aditya Birla Capital — Q1 FY19 Earnings Presentation
41 slides from Aditya Birla Capital's earnings presentation, Aug 10, 2018
Slide 1: Investor Presentation: Financial Results Q1 FY18-19
Investor Presentation FINANCIAL RESULTS Q1 FY18-19 MUMBAI 10th August 2018 A leading Financial Services Conglomerate Aditya Birla Capital Limited
Slide 2: Table of contents
Table of contents 1 | Overview Pg. 3 - 7 2 | Business-wise Performance Pg. 8 - 33 3 | Consolidated Financials & Other Annexures Pg. 34 - 41 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: Our approach
Our approach Leveraging Market Opportunities Product Increasing Innovation and Reach Performance Balanced and Capturing Customer Life Leveraging Profitable Time Value Synergies Growth Strengthening Enablers - Retailisation Risk, Technology and Analytics Aditya Birla Capital Limited 3
Slide 4: Q1FY19: Key highlights
Q1FY19: Key highlights ✓ 40% Individual FYP growth in Life ✓ Ranked No.33 Mutual Fund in Equity Insurance, significantly higher than and Overall Asset under Management Industry growth at 6%1 Highest Gross VNB Margin2 at 37.2% in Equity AAUM reaches Rs 1,00,000 Crore ✓ ✓ our Life Insurance Business i
Slide 5: Power of coming together as ONE BRAND
Power of coming together as “ONE BRAND” Our Consideration Score1 since launch of ABCL Brand in November 2017 Breaking off the Pack Gain in overall Consideration Score Oct’17 Jun’18 To p P r i v a t e S e c t o r B a n k s To p P u b l i c S e c t o r I n s t i t u t i o n s Private Diversified NBFCs
Slide 6: Delivering strong financial performance
Delivering strong financial performance Figures in Rs Crore PROTECTING INVESTING FINANCING C O N S O L I D AT E D 29% 19% 30% 32% 3,374 1,205 2,67,176 53,584 2,553 937 2,25,176 41,066 Q1 FY18 Q1 FY19 Revenue4 Q1 FY18 Q1 FY19 Q1 FY18 Q1 FY19 Q1 FY18 Q1 FY19 Profit After Tax Q1 FY18 Q1 FY19 Growth (Af
Slide 7: Net Profit Reconciliation- IGAAP vs. Ind AS
Net Profit Reconciliation- IGAAP vs. Ind AS Figures in Rs Crore Q1 FY18 Q1 FY19 Net Profit after Minority Interest (As per IGAAP) 173.1 227.1 Impact of EIR on assets and liabilities -3.4 15.4 Impact of ECL methodology adoption -11.5 2.7 Impact of MTM/ Fair Valuation 5.6 -6.7 Impact of share of non-c
Slide 8: Aditya Birla Finance Limited
Aditya Birla Finance Limited 8
Slide 9: Diversified portfolio with value accretive growth
Diversified portfolio with value accretive growth Figures in Rs Crore Large + Mid Corporate (% of AUM) SME + Retail + UHI (% of AUM) Targeting balanced loan book growth SME + Retail + HNI mix grew by 43% Y-o-Y, Targeting 36,250 44,408 increasing to 48% of overall portfolio Balanced Loan Book 56% 50%
Slide 10: Multi-product portfolio catering to a range of customer needs
Multi-product portfolio catering to a range of customer needs Large & Mid Corporate (50% of Loan Book) SME (25% of Loan Book) 6% 4% 8% 12% TL/ WCDL TL/ WCDL 11% 11% 16% 18% LAP 25% 26% Project Loan 28% 29% LRD 27% 24% Structured Finance 48% 41% Supply Chain Finance 32% 35% Construction Finance Q1 FY
Slide 11: Diversified and competitive cost of borrowing
Diversified and competitive cost of borrowing Marginal increase in cost of borrowings 7.85% 7.96% Cost of Borrowing Active treasury management and dynamic changes in 5% 5% borrowing mix, optimising cost of funds Consistently 36% 30% Maintaining a Bank Diversified 23% CP Borrowing Mix 24% Resulting i
Slide 12: Negligible impact on asset quality from ECL transition
Negligible impact on asset quality from ECL transition Figures in Rs Crore Asset Quality Jun’17 Jun’18 Total Loan Book 36,250 44,408 Transitioned to ECL methodology provisioning w.e.f. 1st April 2017 Gross NPA (Stage 3) 172 417 Less: ECL Provision 98 234 Rs 27 Crore incremental provision for stage 3
Slide 13: Key Financials – Aditya Birla Finance Limited
Key Financials – Aditya Birla Finance Limited Figures in Rs Crore Quarter 1 Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) Lending book 36,250 44,408 23% Average yield 11.55% 11.74% Interest cost / Avg. Loan book 6.71% 6.85% Net Interest Income (Incl. Fee Income) 4.84% 4.88% Opex 123 171 Cos
Slide 14: Aditya Birla Housing Finance Limited
Aditya Birla Housing Finance Limited 14
Slide 15: Strong growth in lending book
Strong growth in lending book Figures in Rs Crore Lending Book grew ~2x y-o-y 9,176 Previous Year Lending Book: Rs 4,816 Crore 4,816 Loan Book Affordable Loan book at ~Rs 650 Crore 1.7x growth over previous quarter Q1 FY18 Q1 FY19 68% 71% Focus on building retail granularity Average HL Ticket Size r
Slide 16: Building profitable scale
Building profitable scale Figures in Rs Crore Number of Customers Average Ticket Size (in Lakhs) 25,390 Home Loan 45 28 Ticket Size 62 7,800 36 Q1 FY18 Q1 FY19 Q1 FY18 Q1 FY19 Net Interest Income & NIM % (incl. Fee Income) Stage 3 - GNPA & NNPA % 3.6% 2.9% NIM % Gross NPA Net NPA 63 0.67% 0.42% 39 N
Slide 17: Diversification across products & geographies
Diversification across products & geographies Portfolio Mix (%) Geographic Mix (%) 7% 7% 11% 14% 18% 19% 9% 35% 31% Affordable Housing South 25% 34% 36% 37% West Construction Finance East 16% LAP 16% 14% North 58% 58% 59% Home Loans 36% 30% 29% Q1 FY17 Q1 FY18 Q1 FY19 Q1 FY17 Q1 FY18 Q1 FY19 Scaling
Slide 18: Key Financials – Aditya Birla Housing Finance Limited
Key Financials – Aditya Birla Housing Finance Limited Figures in Rs Crore Quarter 1 ∆ LY% Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) Lending book 4,816 9,176 1.9x Average yield 10.57% 10.04% Interest cost / Avg. Loan book 7.00% 7.15% Net Interest Income (incl. Fee Income) 3.57% 2.89% Rev
Slide 19: Aditya Birla Sun Life AMC Limited
Aditya Birla Sun Life AMC Limited 19
Slide 20: Balanced growth in assets and profitability
Balanced growth in assets and profitability Figures in Rs Crore 2 Year CAGR: Domestic: 29% | Equity: 60% Overall market leadership with No.3 Rank 2,67,176 Domestic AAUM market Share of 10.7% 2,25,176 7,672 Growth in 1,63,121 10,084 Overall 8,175 1,60,239 Equity AAUM grew by 49% y-o-y AAUM 1,45,824 E
Slide 21: Continued focus on retail expansion
Continued focus on retail expansion Figures in Rs Crore Retail + HNI AUM1 at Rs 1,20,000+ Crore HNI Retail 2x 1,21,539 Retail AUM grew significantly higher than peers Increasing 94,826 62,114 74,298 ABSLAMC: 43% | Industry: 33% | Top 5: 28% Retail 61,779 41,782 Penetration 20,332 33,047 47,241 Jun'1
Slide 22: Key Financials – Aditya Birla Sun Life AMC Limited
Key Financials – Aditya Birla Sun Life AMC Limited Figures in Rs Crores Quarter 1 ∆ LY% Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) Domestic AAUM1 2,05,715 2,49,270 21% Domestic Equity AAUM1 59,891 89,031 49% Alternate and Offshore Equity AAUM 9,377 10,235 Total Equity 69,268 99,266 Reven
Slide 23: Aditya Birla Sun Life Insurance Limited
Aditya Birla Sun Life Insurance Limited 23
Slide 24: Strong value creating growth
Strong value creating growth Figures in Rs Crore Individual FYP grew by 40% y-o-y 2 Year CAGR: Individual FYP 36% Significantly higher than peer-group y-o-y growth1 Industry: 6% | Private: 5% | Top 4 Private: 2% Individual FYP 227 Growth1 Improved individual rank by 2 spots to No.71 123 163 Highest
Slide 25: Focus on balanced product and channel mix
Focus on balanced product and channel mix Increasing Share of Individual Protection in Product Mix Balanced Sourcing Strategy led by growth in Partnerships 3% 5% 9% Protection 14% 18% 28% 23% 35% 31% Non-Par Partnerships 36% Par 44% 24% 86% 82% Proprietary ULIP 65% 35% 36% 24% Jun'16 Jun'17 Jun'18 J
Slide 26: Focus on quality of business
Focus on quality of business Average Policy Term1 Average Customer Age1 Persistency Ratios1 ULIP 6 ULIP 37 72.4% Q1 FY19 61.4% Protection 25 Protection 37 70.1% Q1 FY18 PAR 14 60.3% PAR 32 Non-PAR 8 64.0% Non-PAR 37 Q1 FY17 51.4% Overall 14 Overall 35 13th month 25th month Average Premium Paying Ter
Slide 27: Key Financials – Aditya Birla Sun Life Insurance Limited
Key Financials – Aditya Birla Sun Life Insurance Limited Figures in Rs Crore Quarter 1 ∆ LY% Key Performance Parameters FY 17-18 FY 18-19 (PY) (CY) Individual First year Premium 168 237 41% Group First year Premium 117 284 Renewal Premium 590 607 Total Gross Premium 875 1,129 29% Revenue 990 1,287 O
Slide 28: Aditya Birla Health Insurance Limited
Aditya Birla Health Insurance Limited 28
Slide 29: Strong momentum driven by retail growth
Strong momentum driven by retail growth Figures in Rs Crore 76 GWP at Rs 76 Crore Strong 62 GWP 33 Group Retail contribution at 52% as against 6% LY Growth led Covering more than 1 mn lives 58 Retail by Retail 43 GWP 4 Growth Q1 FY 18 Q1 FY 19 Significantly scaled distribution channel 1.0 (Lives in
Slide 30: Building multi-channel leadership capacity for future growth
Building multi-channel leadership capacity for future growth Q1 FY18 Q4 FY18 Q1 FY19 Significant momentum in distribution creation across all channels Branches 15 59 59 7 Banca tie-ups: ▪ HDFC, DCB, RBL, Deutsche Bank , ABPB & AU Bank. Agents 2,900+ 15,500+ 17,500+ ▪ KVB signed up in Q1 FY19 No. of
Slide 31: Driving value through diversification
Driving value through diversification Channel mix - Increasing contribution from Banca Geographical diversification (% contribution of Non-Metro) 44% 26% Agency 27% 32% 69% 28% 51% Banca 7% 8% 25% 28% 23% Others FY 17 FY 18 Q1 FY'19 FY 17 FY 18 Q1 FY'19 Increasing contribution from bancassurance Pre
Slide 32: Other Financial Services businesses
Other Financial Services businesses
Slide 33: Other Financial Services Businesses
Other Financial Services Businesses Figures in Rs Crore Quarter 1 ∆ LY% Key Performance Parameters FY 17-18 FY 18-19 For Other Financial Services Businesses1 (PY) (CY) Aggregate Revenue 88 162 1.8x Aggregate Earnings before tax 9 4 Profitable • Premium placement grew y-o-y by 69% to Rs 998 Crore • G
Slide 34: Annexure: Consolidated Financials
Annexure Consolidated Financials
Slide 35: Segmental Financials – Q1 FY19
Segmental Financials – Q1 FY19 Figures in Rs Crore Revenue EBT FY 17-18 FY 18-19 Businesses FY 17-18 FY 18-19 (PY) (CY) (PY) (CY) 1,027 1,272 NBFC 253 335 271 352 Asset Management1 119 146 990 1,287 Life Insurance 11 29 27% 2,288 2,910 Established Businesses 383 510 33% 116 225 Housing 8 13 64 76 He
Slide 36: Consolidated Profit & Loss
Consolidated Profit & Loss Figures in Rs Crore Quarter 1 Consolidated Profit & Loss FY 17-18 FY 18-19 (PY) (CY) Revenue 2,253 2,978 32% EBITDA 939 1,217 Less: Interest Expenses for lending businesses 660 885 Less: Other Interest Expenses 11 21 EBDT 267 311 Less: Depreciation 20 21 Earnings Before Ta
Slide 37: Annexure: Market Consistent Embedded Value (MCEV) – Life Insurance
Annexure Market Consistent Embedded Value (MCEV) – Life Insurance
Slide 38: MCEV Bridge
MCEV Bridge Figures in Rs Crore 37 21 388 383 Economic 71 Assumption variance Change Gross Expense Variance Operating 337 VNB (Including SH variance Expense) Unwinding 4,281 of Profit 3,810 12.4% Growth Y-o-Y FY17 FY18 Aditya Birla Capital Limited 38
Slide 39: Sensitivity Analysis
Sensitivity Analysis Scenarios % Change % change in Scenarios % Change % change in in IEV Gross VNB in IEV Gross VNB Reference Rates and Assets Maintenance Expenses Increase of 100 bps in the reference rates 4.0% 14.9% 10% increase (2.1%) (1.9%) Decrease of 100 bps in the reference rates (5.2%) (18.
Slide 40: 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 40
Slide 41: Glossary
Glossary ▪ CY – Current Year ▪ NII – Net Interest Income ▪ FY – Financial Year (April-March) ▪ NIM – Net Interest Margin ▪ PY – Corresponding period in Previous Year ▪ DPD – Days past due ▪ PQ – Previous Quarter ▪ CAB – Corporate Agents and Brokers ▪ Q1– April-June ▪ AAUM – Quarterly Average Assets