Home Credit. Presentation of 3Q 2017 results 27 November 2017

Transcription

1 Home Credit Presentation of 3Q results 27 November

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. 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. The number in this presentation are largely taken from the audited consolidated IFRS statements of Home Credit B.V. In the interest of comparability historic numbers for Vietnam are pro-forma and certain numbers in respect of Indonesia are also pro-forma. For more information on Home Credit Group, please visit

3 Home Credit consumer finance leader in growth markets Highlights Key metrics and business mix ( ) HC has experienced high growth rates in its key regions: China and Vietnam: fast-growing and profitable markets with the new volume growing by 127% and 59%, respectively Other Asian businesses: (Indonesia, India and Philippines) all three businesses pursuing a rapid expansion setting themselves for a good trajectory to break-even Russia: fully recovered from crisis, growing again the loan portfolio and achieving strong profits Other: (Czech Republic, Slovakia and Kazakhstan) which are mature businesses Number 1 in point-of-sale lending in most of markets Multichannel customer-centric distribution with 399 thousand distribution points and substantial online presence 28.7m customers and 155 thousand employees Global footprint covers 10 countries with 3.5bn population Leading edge risk management leveraging big data and biometrics Strong and diversified funding Consumer durables loans 37.4 Other 6.3 Cash loans Deposits (bn) Gross loans (bn) Equity (bn) Net income (m) (41.6) Net interest margin 15.6% 14.0% 14.1% 14.2% Cost of risk 13.2% 7.6% 8.0% 7.7% RoAE (3.3%) 16.2% 14.1% 19.5% # of distribution points (000) # of active customers (m) Ratios annualized where applicable. CZ & SK 9.0% Russia 17.2% Total net loan : 13.9bn Asia 8.4% Rest CIS 2.8% China 62.6% 1

4 Meeting Agenda 1. STRATEGY AND BUSINESS 2. SUMMARY BY COUNTRY 3. KEY FINANCIAL INDICATORS

5 Home Credit: business highlights 1 Customer-centric multichannel distribution with strong cross-sell 5 Responsible lending at the heart of our practices 2 Leading positions in attractive markets 4 Strong and diversified funding 3 Leading edge risk management 2

6 1 Customer-centric multichannel distribution with strong cross-sell Acquisition: POS and cash loan walk-in Distribution Products 399 thousand distribution points (POS, branches) 300 e-shop agreements Own websites and mobile apps Call centres Purpose Average amount Consumer durables loan Electronics, white goods, Two wheelers Cash loan General purpose Average term 11 months 16 months Cross-sell Distribution Products Existing 90m customer database Up to 66% of customers eligible for cross-sell within 18 months Approximately 16% of customers take either cash loan or credit card within 36 months. Cash loan Credit cards Purpose General purpose General purpose Average amount 1,942 1,105* Average term 33 months NA Volumes disbursed ( bn) 8,1 6,5 3,8 4,2 2, Volumes disbursed ( bn) 6,3 4,5 3,1 1,7 2, Q Full year 3Q Full year *Average credit limit per active credit card 3

7 1 Expanding offline footprint and customer base... Number of POS ( 000) Russia China Other(1) Asia Active clients (m) Cooperation with partners Home Credit helps retailers increase their sales and revenues by making loans easily accessible Home Credit also works with electronics manufacturers (Samsung, OPPO, Huawei, etc.) to support their marketing efforts 1 Other includes Czech Republic, Slovakia, Belarus, Kazakhstan 4

8 1 and growing in Online Growth in Sales Growth in Mobile applications penetration Social Media followers : 4,963,056 5

9 2 Leading positions in attractive markets Established High growth markets 1 China GDP growth 6.7% Net loans ( m) 8,698 1 Vietnam GDP growth 6.2% Net loans ( m) 516 Russia Kazakhstan Czech Republic Slovakia Mature markets 1 GDP growth (0.2)% Net loans ( m) 2,377 2 GDP growth 0.2% Net loans ( m) GDP growth 2.5% Net loans ( m) GDP growth 3.3% Net loans ( m) 228 Start-up high growth market India Indonesia* The Philippines 2 new GDP growth 7.0% Net loans ( m) GDP growth 5.0% Net loans ( m) GDP growth 6.8% Net loans ( m) 142 United States of America Strategic partnership with Sprint regarding financing services for mobile phones Note: Net loans for and real GDP growth for 2016 *Included portfolio which is not on HC books and is financed Source for GDP: BMI Research within JFS 6

10 3 Leading edge risk management Key aspects of risk management Strong risk performance Highly automated process: 5.5m applications per month Paperless applications roll-out progressing NPL coverage 117% 106% 116% 128% 120% Systematic leverage of big data Proprietary customer database: 90m customers Anti-fraud prevention using biometric measures Over 80 scoring models 16,7% 12,2% 17,8% 15,3% 13,2% 22 thousand collections FTE s; 93.3% collections efficiency (1) 10,0% Customer focused risk assessment: median time to yes is less than 1 minute 7,6% 7,7% 6,1% 6,2% Risk based pricing introduced progressively 1 (1 (Gross loans DPD 0-90 in previous month / Gross loans DPD in current month)) 2 Impairment losses / Average net loans 3 End of period gross loans >90dpd / Total end of period gross loans Cost of risk (2) NPL ratio (3) 7

11 4 Strong and diversified funding Diversified funding Interest rate gap profile ( m) Funding sources (as of 30 September ) Subordinated liabilities 2% Debt securities 5% Other 4% Equity 9% Customer deposits 33% 763 Interest position (as of 30 September ) Liabilities Assets Gap Diversified funding Loans received 48% Total: 19.5 bn 8

12 5 Responsible lending at the heart of our practice Our principles Home Credit prides itself on being a responsible lender and an active participant in the communities in which it operates. We practice in Financial Inclusiveness. Traditional lenders often do not adequately cater to the needs of those on lower incomes or first-time borrowers. The need for a developed credit history and collateralization are common barriers for individuals who would benefit from using formal financial services. This exclusion can have a detrimental effect on their financial and personal well-being, and hinders economic and social development. We invest in financial Literacy. Educating our customers and the communities in which we operate is the foundation of our sustainability programme. To help ensure customers make the right borrowing decisions based on their own circumstances, we have introduced a cooling-off period as standard across all our operations. Our Safety Guarantee provides options for struggling clients to offer them additional time for repayment, payment holidays, late penalty waivers etc. 9

13 Meeting Agenda 1. STRATEGY AND BUSINESS 2. SUMMARY BY COUNTRY 3. KEY FINANCIAL INDICATORS

14 China Key financial data ( m) Active clients (000 ) Net loans Net profit (YTD) Q1 H Number of POS Market opportunity (consumer lending) ( bn) (1) #1 in POS Q1 1H % of GDP 9.4% 11.1% 12.7% Q1 H POS market position strengthening thanks to product offering and relationship with retailers. Massive expansion of POS distribution network 1 Euromonitor 10

15 Vietnam Key financial data ( m) Active clients (000 ) Net loans Net profit (YTD) Q1 H H Q1 H1 Number of POS Market opportunity (consumer lending) ( bn) (1) #1 in POS % of GDP 11.2% 12.7% 13.6% Q1 H Volumes increasing rapidly through a growing portfolio of products Business benefiting from its prominent position with key retailers 1 Euromonitor 12

16 Russia Key financial data ( m) Active clients (000 ) Net loans Net profit (YTD) Q1 H1 (146) H3 Number of POS Market opportunity (consumer lending) ( bn) (1) #1 in POS Q1 H % of GDP 8.1% 6.7% 6.3% na Q1 H Improvement of macroeconomic environment easing pressures on retail lending Digitalization of the business contribute to higher efficiency and higher profitability 1 The Central Bank of the Russian Federation 13

17 Kazakhstan Key financial data ( m) Active clients (000 ) Net loans Net profit (YTD) Q1 H Number of POS Market opportunity (consumer lending) ( bn) (1) #1 in POS Q1 H1 % of GDP 6.5% 6.4% 5.6% 7,6 7,7 7, Q1 H Fast growth both in volumes and in profitability on the backdrop of macroeconomic stabilization Company improving it market shares considerably 1 National Bank of Kazakhstan 14

18 Czech Republic Key financial data ( m) Active clients (000 ) Net loans 903 Net profit (YTD) Q1 H H3 Number of POS Market opportunity (consumer lending) ( bn) (1) #1 in POS Q1 H % of GDP 4.6% 4.7% 4.8% 7,2 7,8 8, Q1 H Profitability improvements both in Home Credit and Air Bank businesses 1 Czech National Bank 15

19 India Key financial data ( m) Active clients (000 ) Q1 Number of POS Market opportunity (consumer lending) ( bn) (1) Net loans 282 H (26) Net profit (YTD) (61) (39) (54) #2 in POS % of GDP 5.8% 6.2% 7.1% Q1 H Q1 H Almost doubling its distribution network in the last six months On-going effort to optimize distribution mode for POS loans while growing volumes 1 Euromonitor 16

20 Indonesia Key financial data ( m) Active clients (000 ) Net loans* Net profit (YTD) Q1 H1 Number of POS (15) (19) (15) (15) #1 in POS Market opportunity (consumer lending) ( bn) (1) Q1 H % of GDP 10.7% 10.5% 10.3% Q1 H Achieving no.1 position in a competitive market 1 Euromonitor *Included portfolio which is not on HC books and is financed within JFS 17

21 The Philippines Key financial data ( m) Active clients (000 ) Net loans 142 Net profit (YTD) (5) Q1 H1 (14) (16) (12) Number of POS Market opportunity (consumer lending) ( bn) (1) #1 in POS Q1 H % of GDP 7.0% 7.4% 7.7% Q1 H Continuous geographical expansion accompanied by high growth of business Company on a good trajectory to reach break-even 1 Euromonitor 18

22 Meeting Agenda 1. STRATEGY AND BUSINESS 2. SUMMARY BY COUNTRY 3. KEY FINANCIAL INDICATORS

23 Strong financial performance Strong loan growth ( bn) (1) Resilient revenue ( m) (2) NIM 15.6% 14.0% 14.1% 14.2% 5,8 9,9 8,0 13, Recovering profitability Cost of risk 13,2% 7,6% 8,0% 7,7% Recovering profitability ( m) RoAE (3.3)% 16.2% 14.1% 19.5% Growing the size of business while preserving operating margins Impairment charges slightly up vs end 2016 due to high proportion of new customers from Asian markets 1 Net loans 19

24 Profit & Loss: Continuous improvement in profitability ( m, ratios annualized where applicable) Net interest income 1,207 1,532 1,068 1,690 Net fee income Other operating income Operating income 1,619 2,000 1,397 2,187 Operating expenses (887) (1,115) (789) (1,157) Impairment losses (725) (563) (407) (688) Profit before tax Income tax expense (50) (115) (71) (110) Profit from continuing operations (42) Attributable to equity holders (40) Key performance indicators NIM 15.6% 14.0% 14.1% 14.2% CIR 54.8% 55.7% 56.5% 52.9% CoR 13.2% 7.6% 8.0% 7.7% ROAE (3.3%) 16.2% 14.1% 19.5% 20

25 Balance sheet: Strong capital and asset quality ( m) Assets Cash and cash equivalents 1,343 2,412 2,041 2,815 Financial assets 1,501 1,252 1,301 1,234 Due from banks Net loans 5,835 9,866 8,028 13,888 Other assets Total assets 9,656 14,704 12,396 19,490 Liabilities Customer deposits 4,909 5,401 5,002 6,341 Due to banks 2,331 6,427 4,820 9,376 Debt securities Subordinated liabilities Other liabilities Total liabilities 8,460 13,202 11,059 17,754 Total equity 1,196 1,501 1,337 1,736 NPL ratio 10.0% 6.1% 7.1% 6.2% NPL coverage ratio 116% 128% 123.5% 120.4% 21

26 Appendix

27 Home Credit s management team A team of recognized leaders in their fields, committed to high standards of corporate governance Jiri Smejc CEO Tomas Kocka Deputy CEO Jean-Pascal Duvieusart Funding & Capital Markets Mel Carvill CGIRO Christoph Glaser CFO Tomas Jirgl Regional Executive Director David Minol Regional Executive Director Pavel Vyhnalek Regional Executive Director Pavel Rozehnal CLO Radek Pluhar CRO Khalid Husseini CIO Miroslav Boublik Head of Special Projects Petr Janák CHRO Ludek Mraz Head of CRM

28 Strong and diversified parent company Key financial results * Key investments Total assets: 34.8bn Equity: 6.9bn Listed Value 2.6bn (market value of PPF s 81.06% share) Net profit: 1.2bn 0.7bn (book value) Ownership Petr Kellner 98.92% Ladislav Bartoníček 0.54% Jean-Pascal Duvieusart 0.54% 1.9bn (book value) 0.7bn (book value) 0.54bn (market value of PPF s 12.92% share) Diverse business activities encompassing banking and financial services, telecommunications, biotechnology, insurance, real estate, and agriculture Strong cash flow generation capacity to support further investment in high growth businesses * Total assets and Equity as of 30 June, Net profit for 12 months period ended 30 June Bio technology investment

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