Home Credit B.V. 3 rd Quarter 2018 Results Presentation November 27 th, 2018

Transcription

1 Home Credit B.V. 3 rd Quarter 2018 Results Presentation November 27 th,

2 Disclaimer This presentation has been prepared solely for informational purposes and shall not be considered as an offer to sell or the solicitation of an offer to buy, subscribe for or otherwise acquire any securities of or obtain lending services from Home Credit B.V., PPF Group N.V. or any of their affiliates in any jurisdiction and shall not be treated as any investment advice or recommendation. This presentation is not directed to, or intended for distribution or use, where it is prohibited by operation of law. The presentation does not take into account, in any way whatsoever, the investment objectives, financial situation or specific needs of its recipients. This presentation and its contents may not be copied or disseminated, in part or as a whole, without prior written consent of Home Credit B.V. Information and opinions presented in this presentation may have been obtained or derived from various sources which are believed by Home Credit B.V. to be reliable but such information has not been verified by Home Credit B.V. Certain information in this presentation is based on management estimates. Such estimates have been made in good faith and represent the current beliefs of members of management. Those management members believe that such estimates are founded on reasonable grounds. However, by their nature, estimates may not be correct or complete. Accordingly, no representation or warranty (express or implied) is given that such estimates are correct or complete. Where this presentation quotes any information or statistics from any external source, it should not be interpreted that Home Credit B.V. has adopted or endorsed such information or statistics as being accurate. This presentation contains forward-looking statements. These statements reflect the Home Credit B.V. s current knowledge and its expectations and projections about future events and may be identified by the context of such statements or words such as anticipate, believe, estimate, expect, intend, plan, project, target, may, will, would, could or should or similar terminology. By their nature, forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Home Credit B.V. s control that could cause the actual results and performance to differ materially from any expected future results or performance expressed or implied by any forward-looking statements. No representation or warranty whatsoever, express or implied, is made as to the accuracy, completeness, consistency or the reliability of the information contained in this document and nothing contained in this presentation is, or should be relied upon as, a promise or representation. We accept no liability for loss arising from the use of any information or acting on any opinion contained in this document. We retain the right to change the contents of this presentation at any time without notice. Neither Home Credit B.V. or any other person is under any obligation to update or keep current the information contained in this presentation or to correct any inaccuracies in any such information which may become apparent or to provide you with any additional information. None of its directors, officers, employees, direct or indirect shareholders, agents, affiliates, advisors or any other person accept any responsibility, liability or duty of care whatsoever for the contents of this presentation, and no representation or warranty, express or implied, is made by any such person in relation to the contents of this presentation. The numbers in this presentation are largely taken from the audited consolidated IFRS statements of Home Credit B.V. In the interest of comparability certain numbers of PT. Home Credit Indonesia are pro-forma. For more information on Home Credit Group, please visit 2

3 Meeting Agenda 1. HIGHLIGHTS OF 3Q18 2. GROUP FINANCIAL PERFORMANCE 3. COUNTRY PERFORMANCE 4. APPENDIX 3

4 Home Credit continues profitability trend Total net loans as at 3Q18: 16.7bn Consumer durables loans 28% Other 5% Key metrics and business mix Ratios are annualized where applicable. Cash loans 67% Asia (excl. China) 10% CZ & SK 9% Russia 15% Rest 4% China 62% 2Q17 3Q Q18 (2) 3Q18 Deposits ( bn) Gross loans ( bn) Equity ( bn) Net income ( m) Net interest margin 13.7% % 15.8% 16.1% Cost of risk 8.3% % 10.6% 9.9% Cost income ratio 53.4% % 45.0% 43.2% RoAE 13.6% % 15.7% 36.7% # of distribut.points ( 000) # of active customers (m) (1) Impact, net of tax, ot the introduction of IFRS 9 amounts to a reduction in equity of 203m at 1 January Q18 Highlights OVERALL: 3Q18 Net income up to 173m from 71m in 2Q18 and 99m in 3Q17 Cost of risk down from 10.6% to 9.9% QoQ Net interest margin improved by 1.4 p.p. from 3Q17 to 3Q18 Cost income ratio down from 52.3% to 43.2% YoY COUNTRY HIGHLIGHTS: CN 3Q18 Net income of 88m (+ 42m QoQ) Cost of risk reduced from 13.9% in 2Q18 to 12.4% in 3Q18 Strong support from funding partners confirmed by first revolving ABS of RMB 3bn or Joint Lending starting in September RU Growing business supported by controlled risk being on its historical low levels (risk costs of 2.1%, NPL 3.9%) Fitch rating confirmed at the level fo BB- Share of active customers using online services reached 60% VN Increased volume generated across all product range with the new volume amounting to VND 24tr (+ 17% YoY) IN Continued expansion (175 cities across 20 states with 29t POS in 3Q18) allowing double-digit growth in the business and net loans increase by 61% to 603m in 3Q18 from 374m in 3Q17 Local funding base 177m as of 9M18 through Securitization, NCD s, Direct Assignment, CP and Term Loans; 63m raised localy only in 3Q18 ID Continued strong growth from previous quarters, adding 1,665 POS to its network to a total of 17,547 (+90% YoY) serving more than 1.6m active customers and disbursing IDR 2.2tr of new volume (+62% YoY) PH Three consecutive quarters of profitability Successfully raised Php 6.5b via loan syndication (initial volume Php 5b increased by green shoe tranche) including oversubscription of Php 1.5b, i.e. total oversubscribtion 167% 4

5 Home Credit s five key strategy pillars Online & Offline Responsible Lending Attractive Markets Strong Funding Leading Risk Management 5

6 Leading positions in attractive markets Country Population (m) GDP Growth 2017 (2) RoAE 3Q18 (3) Total Assets 3Q18 ( m) Total Assets Growth (YoY) China 1, % 26.6% 11, % India 1, % 125.2% % US % (158.1%) % Indonesia (1) % (5.1%) % Russia % 14.5% 3,322 (9.7%) Philippines % 5.6% % Vietnam % 29.5% % Kazakhstan % 59.7% % CZ & SK 15 CZ 4.3% / SK 3.4% 20.7% 4, % (1) Included portfolio which is not on HC books and is financed within JFS (2) Source: The World Bank (3) Annualized 6

7 Strong online growth driven by HC App and partnerships Sales volume ( m) Mobile app monthly active users ( 000) % % Q17 4Q2017 3Q /17 09/17 12/17 03/18 09/18 Social media followers: 13,553,056 as at 3Q18 / +36% QoQ growth 7

8 Home Credit keeps expanding network and client base Number of POS ( 000) % Asia (excl. China) Other China (1) Russia Q17 3Q18 Active clients 9.1m 28.6m +1.2% 28.9m Total clients 44.4m 90.3m +23.1% 111.2m (1) Other includes Czech Republic, Slovakia, Belarus, Kazakhstan, US. 8

9 Home Credit Cost income ratio improving continuously Cost income ratio 53.4% 52.3% 52.0% 45.0% 43.2% KEY DRIVERS ARE: Economies of scale enabled by growth in key countries Roll-out of mobile and alternative distribution channels 2Q17 3Q Q18 3Q18 Number of employees ( 000)

10 Home Credit risk costs reduced sharply in 3Q18 Improving risk performance NPL coverage 8.9% 122% 144% 132% 6.9% 14.9% 8.2% 11.7% 10.6% 9.0% 8.9% Q18 2Q18 3Q18 (1) (2) Cost of risk NPL ratio Improving risk performance Conservative provisioning policy (1) Impairment losses / Average net loans (2) End of period gross loans > 90DPD / Total end of period gross loans 132% Key drivers CHINA 3Q18 results showing mitigation of 1H18 performance, which was strongly affected by the impact of regulatory actions introduced in China in 2017 Home Credit s proactive management of emerging retail over-leveraging led to significant improvement in default rate of loans originated after September 2017 The new originations booked in 2018 in China XS are expected to have 50% lower risk than the actual observed losses on previous vintage bookings OTHER COUNTRIES Risk performance in other countries relatively stable IFRS 9 The impact of IFRS 9 introduction in January 2018 (the year-opening-balance impact) pushed the NPL coverage from 125% to 149% (retail only) 10

11 Home Credit maintains conservative diversified funding strategy with very limited duration gap Diversified funding Very limited duration mismatch Funding sources of 22.2bn as at 3Q18 Interest position (as at 3Q18) Subordinated liabilities 1% Debt securities 5% Other 3% Equity 9% Customer deposits 30% Liabilities Assets Gap Loans received 52%

12 Home Credit enjoys strong access to capital markets Commercial Papers in India First Revolving Securitization Transaction of Consumer Loan Portfolio in China Non-Convertible Debentures in India Home Credit India INR 2.5bn Home Credit India 2 CPs Rating: A- HC CFC RMB 3bn Home Credit China ABS project Rating: AAA/AA+ Home Credit India INR 1.9bn Home Credit India 2 NCDs September 2018 October 2018 July - September

13 Meeting Agenda 1. HIGHLIGHTS OF 3Q18 2. GROUP FINANCIAL PERFORMANCE 3. COUNTRY PERFORMANCE 4. APPENDIX 13

14 Balance sheet ( m) Assets 2Q17 3Q Q18 3Q18 YoY% Cash and cash equivalents 2,762 2,815 3,021 2,322 2,833 Financial assets 1,185 1,232 1,533 1,243 1,188 Due from banks Net loans 12,540 13,888 15,452 16,439 16, Other assets ,117 1,365 1,166 Total assets 17,760 19,490 21,526 21,763 22, Liabilities Customer deposits 5,539 6,046 6,356 6,676 6, Due to banks 8,995 9,376 10,598 10,973 11, Debt securities ,122 Subordinated liabilities Other liabilities ,163 1, Total liabilities 16,244 17,754 19,498 19,920 20,280 Total equity 1,516 1,736 2,028 1,843 1, NPL ratio 5.9% 6.2% 6.9% 9.0% 8.9% NPL coverage ratio 129% 120% 122% 132% 132% With the view to further optimize the Home Credit Balance Sheet, we are continuously reviewing all options to strengthen capital position by issuing different types of securities, including but not limited to shares and subordinated bonds, at the group level as well as country level. 14

15 Profit & Loss ( m, ratios annualized where applicable) 2Q17 3Q Q18 (1) 3Q18 Net interest income , Net fee income Other operating income Operating income , Operating expenses (385) (413) (1,626) (443) (427) Impairment losses (247) (240) (1,124) (419) (408) Profit before tax Income tax expense (36) (38) (129) (36) 13 Profit from continuing operations Attributable to equity holders Key performance indicators p.p. YoY NIM 13.7% 14.7% 14.7% 15.8% 16.1% 1.4 CIR 53.4% 52.3% 52.0% 45.0% 43.2% (9.1) CoR 8.3% 7.3% 8.9% 10.6% 9.9% 2.6 RoAE 13.6% 24.4% 14.5% 15.7% 36.7% 12.2 (1) Under IAS 39, profit before tax would have been higher by 71m in 3Q18 (compared to profit before tax as reported, i.e. including IFRS 9 adoption). 15

16 Meeting Agenda 1. HIGHLIGHTS OF 3Q18 2. GROUP FINANCIAL PERFORMANCE 3. COUNTRY PERFORMANCE 4. APPENDIX 16

17 China Number of POS Active clients ( 000) Net Loans ( m) Net Income ( m) Further improvement in risk costs together with operation and collection efficiency improved by using artificial intelligence in business (VoiceBot and ChatBot) leads to 3Q18 net income of 88m First revolving ABS in the amount of 3BRMB issued 17

18 Russia Number of POS Active clients ( 000) Net Loans ( m) Net Income ( m) Google Pay, Apple Pay and Samsung Pay, a higly convenient and secure mobile payment service, launched by HCFB Share of active customers using online services reached almost 60% Rating BB- with Stable outlook confirmed by Fitch 18

19 Kazakhstan Number of POS Active clients ( 000) Net Loans ( m) Net Income ( m) Strong and stable business performance both in volume and in profitability Rating B+ with Stable outlook confirmed by Fitch 19

20 Vietnam Number of POS Active clients ( 000) Net Loans ( m) Net Income ( m) Strategic partnership with MoMo e-wallet - fast, convenient and time-saving service 20

21 Czech Republic Number of POS Active clients ( 000) Net Loans ( m) Net Income ( m) Voice Analysis and other powerful and time-saving innovations introduced, revolving engine and fastest e-shop financing solution - > stable and profitable performance 21

22 India Number of POS Active clients ( 000) Net Loans ( m) Net Income ( m) Further expansion of POS distribution network combined with alternative distribution 63m out of total 177m from local sources raised in 3Q18 22

23 Indonesia Number of POS Active clients ( 000) Net Loans ( m) (1) Net Income ( m) (1) Included portfolio which is not on HC books and is financed within JFS Cooperation agreement wigned with AirAsia, affiliation of the AirAsia Group - > first financing company in Indonesia that provides payment options for airline tickets 23

24 Philippines Number of POS Active clients ( 000) Net Loans ( m) Net Income ( m) Continued growth of the business resulted in delivering the first three consecutive quarters of profitability Successfully raised Php 6.5B (Php 5B and green shoe option Php 1.5B) via loan syndication total amount of commitment received: Php 8.35B, i.e. oversubscription of 167% 24

25 Meeting Agenda 1. HIGHLIGHTS OF 3Q18 2. GROUP FINANCIAL PERFORMANCE 3. COUNTRY PERFORMANCE 4. APPENDIX 25

26 Home Credit s Senior Management Team A team of recognized leaders in their fields, committed to high standards of corporate governance Ondrej Frydrych CEO Tomas Kocka Chief Commercial Officer Jean-Pascal Duvieusart Chief BD Officer and Head of CM Mel Carvill CGIRO Christoph Glaser CFO Radek Pluhar CRO David Minol Regional Executive Director Pavel Vyhnalek Regional Executive Director Pavel Rozehnal CLO Khalid Husseini CIO Vendula Chiznakova Head of FP&A Pavel Krbec Head of Online Miroslav Boublik Head of Special Projects Petr Janák CHRO Ludek Mraz Head of CRM Radek Hubeny Head of Strategy 26

27 Multichannel distribution with strong cross-sell Acquisition: POS and cash loan walk-in Cross-sell Consumer durables loan Cash loan Cash loan Credit cards Products Purpose Average amount Electronics, white goods, twowheelers General purpose 304 1,635 Products Purpose General purpose General purpose Average amount 2,344 1,079 Average term 10 months 28 months Average term 41 months N/A Volumes disbursed ( bn) Volumes disbursed ( bn) Q 3Q 2Q 3Q 27