PT BFI FINANCE INDONESIA: FY14 RESULTS PEOPLE AT THE CORE Disclaimer: The information contained in this presentation is strictly confidential for PT BFI Finance Indonesia Tbk (BFI or the ‘Company’) and is provided by the Company to you solely for your reference. Any reproduction, dissemination or onward transmission of this presentation or the information contained herein is strictly prohibited. By accepting delivery of this presentation you acknowledge and agree to comply with the foregoing restrictions. In addition, this presentation may includes projections and forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on assumptions and are subject to various risks. Such forward-looking statements are not guarantees of future performance and no assurance can be given that any future events will occur, that projections will be achieved or that the Company’s assumptions will prove to be correct. Actual results may differ materially from those projected and the Company does not undertake to revise any such forward-looking statements to reflect future events or circumstances. March 2015
Transcript
PT BFI FINANCE INDONESIA: FY14 RESULTS
PEOPLE AT THE CORE
Disclaimer: The information contained in this presentation is strictly confidential for PT BFI Finance Indonesia Tbk (BFI or the ‘Company’) and is provided by the Company to you solely for your reference. Any reproduction, dissemination or onward transmission of this presentation or the information contained herein is strictly prohibited. By accepting delivery of this presentation you acknowledge and agree to comply with the foregoing restrictions. In addition, this presentation may includes projections and forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on assumptions and are subject to various risks. Such forward-looking statements are not guarantees of future performance and no assurance can be given that any future events will occur, that projections will be achieved or that the Company’s assumptions will prove to be correct. Actual results may differ materially from those projected and the Company does not undertake to revise any such forward-looking statements to reflect future events or circumstances.
• Managed Receivables grew 17% driven by strong Booking from the previous FY as well as longer tenor loans, outperforming industry receivables growth of 8% yoy (Sep-14 data, Bank Indonesia), and in spite of contraction in national 4W sales by 1.8% (Gaikindo)
• Net Revenue growth of 21% driven largely by strong Consumer Financing business, higher yields and increase in Receivables book
• 24 new outlets
PROFITABILITY
• 2014 PBT 12% and PAT 17% yoy, with ability to maintain yields, higher efficiency in operations, and strong receivables growth
Total Receivables 8,720 8,047 8.4% 8,720 7,345 18.7%
Total Assets 12,198 11,778 3.6% 12,198 10,534 15.8%
Total Borrowings^ 8,039 7,765 3.5% 8,039 6,838 17.6%
Total Equity 3,614 3,672 1.6% 3,614 3,397 6.4%
• Strong Receivables growth from previous FY Bookings, and longer tenors
• Increased exposure to offshore funding, lowering average cost of funds
^ Includes channeling and joint financing transactions
* All absolute figures have been rounded to the closest Rp billion and therefore may have some discrepancies with percentage calculations
Strong Receivables growth in spite of slower economy and weak automotive & heavy equipment sales
• Strong Non-Dealer growth offset by slower HE Leasing and Dealer financing
• Overall increase slower that previous years due payment of dividends
PROFIT & LOSS HIGHLIGHTS
5
In Rp bil (unless otherwise stated)
4Q14 3Q14 QoQ 2014 2013 YoY
Interest Income 447 423 5.5% 1,660 1,374 20.8%
Financing Cost 140 129 7.9% 503 423 19.0%
Net Interest Income 307 294 4.4% 1,157 951 21.6%
Fee Based Income 161 145 11.1% 600 492 21.9%
Net Revenue 468 439 6.6% 1,756 1,443 21.7%
Operating Expenses 213 192 11.0% 804 661 21.7%
Operating Income 255 247 3.2% 952 783 21.7%
Cost of Credit 50 49 1.5% 204 115 77.1%
PBT 205 198 3.6% 748 667 12.1%
PAT 189 149 26.8% 597 509 17.4%
Comprehensive Income 157 149 5.1% 565 509 11.0%
* All absolute figures have been rounded to the closest Rp billion and therefore may have some discrepancies with percentage calculations
• Strong Consumer Financing revenue
• Yield improvement of 47 bps YoY
• Strong Receivables growth
• Higher efficiencies in operations resulted in slower Opex growth
• Higher write-offs in some regions (Kalimantan, Sulawesi)
• Increase Loan loss reserve
• Lower (20%) tax rate applied vs 25% in 2013
Higher yield resulting in strong Revenue growth, with efficient operational and cost management
KEY RATIOS
6
4Q14 3Q14 QoQ 2014 2013 YoY
Net Interest Margin 8.0% 8.0% 0.0% 7.9% 7.9% 0.0%
Cost to Income 45.6% 43.7% 1.9% 45.8% 45.8% 0.0%
COC / Avg Rec. 1.9% 2.0% 0.1% 1.9% 1.4% 0.6%
ROAA 6.4% 6.0% 0.3% 6.6% 6.8% 0.2%
NPL* 1.5% 1.7% 0.2% 1.5% 1.4% 0.1%
LLR / Receivables 1.9% 1.9% 0.1% 1.9% 1.4% 0.5%
Debt / Equity 1.5x 1.3x 0.2x 1.5x 1.3x 0.2x
* Defined as Pastdue >90 days, Calculated from total managed receivables (included off B/S receivables)
• Resilient and able to pass through the increase interest
• Continue to show manageable asset quality despite challenging economic conditions
• Calculated based PD & LGD
• Compliance to IFRS No. 39 / PSAK No. 55
Maintains stable NIM and NPL despite of industry headwind
3,633 5,487 7,373 9,570 11,220
4,155
5,742
6,993
8,652 9,295
-
2,000
4,000
6,000
8,000
10,000
12,000
2010 2011 2012 2013 2014
Rp
bil
ABILITY TO BUILD A MORE ROBUST BALANCE SHEET
7
Bookings vs Receivables Growth (2010-2014)
Sustainable loan and revenue growth over the years – backed by better asset mix
Revenue Growth (2010-2014)
10,463
11,220
4,546 4,749
1H14 2H14
Bookings Managed Receivables
CAGR B: 22% R: 26%
• Loan book shows improvement over the years – able to improve quality and tenor of loans booked, resulting in consistently faster Receivables growth compared to Bookings
• FY14 strong Receivables growth yoy in spite of slower Bookings growth and weak automotive sales
922 1,261 1,582 1,890 2,299
-
500
1,000
1,500
2,000
2,500
2010 2011 2012 2013 2014
Rp
bil
Revenue
• Consistently strong growth in Revenue as a result of robust balance sheet
• Shows ability to maximise income generation from assets 1,100 1,200
1H14 2H14
CAGR 26%
* Rounded to the nearest billion
STABLE PROFITABILITY OVER THE YEARS
8
PBT Growth ROA Trend vs Industry Cost-to-Income*
362 425
490 509
597
-
100
200
300
400
500
600
2010 2011 2012 2013 2014
Rp
bil
11.6%
9.3%
8.3%
6.8% 6.6%
4.42%
3.39% 3.71% 3.75%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2010 2011 2012 2013 2014
41% 43% 43% 46% 46%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2010 2011 2012 2013 2014
• Consistent PAT growth • Tax rate normalised to 20%
after fulfilling public float requirement for FY14
• Efficient OPEX management in spite of aggressive expansion over the years
• One of the highest ROA companies in the industry
• Consistently outperformed industry
• Cost-to-income stable over 2013-2014 period in spite of expansion to open 24 new outlets in FY14
* G&A + Marketing Expense/Net Revenue * 2014 annualised based on Sep-14 results Source: Company, Infobank
Still one of the most profitable multifinance companies, with ROAs much ahead of the industry
CAGR 13%
ASSET QUALITY UNDER CONTROL
9
NPL Trend (2011-2014) Write-Offs (2011-2014)
0.68%
0.82% 0.89%
1.38%
0.44% 0.53%
0.64%
1.00%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
2011 2012 2013 2014
Gross Write-Off % Net Write-Off %
• Increased portfolio NPL driven by loans to commodities sector, mainly in Kalimantan
• Managable net write-offs of less than 1% over the years
• Lower write off than its peers
1.20% 1.05%
1.38% 1.48%
2.66%
2.18%
2.58%
3.46%
0.98% 0.85%
1.20% 1.22%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
2011 2012 2013 2014
NPL % Leasing NPL% Consumer Financing NPL %
Higher NPLs and Write-offs due to economic conditions, especially in commodity related sectors
STRONG CAPITAL BASE
Cost of Funds (2010-2014)
10
49% 41% 37% 33% 31%
40%
40%
31% 31% 34%
4%
8%
15% 14% 14%
6% 12%
18% 22% 21%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2011 2012 2013 2014
Equity Bank borrowings
Bonds & MTN Channelling & JF
• Increasingly more diversified funding sources, which has helped especially in the last year to mitigate increasing cost of borrowings from local banks
Source of Funding (2010-2014)
12.5% 12.7%
11.3% 10.7%
11.2%
6.5% 6.6% 5.8%
6.5%
7.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2010 2011 2012 2013 2014
BFIN Cost of Funds Average BI Rate
Capital structure more diversified, resulting in better management of borrowing cost and stable NIM
• Favourable cost of funds trend compared to benchmark BI rate movement – able to maintain NIMs even in adverse market conditions
1,941 2,366 2,862 3,397 3,614
Total Equity
DIVERSIFIED PORTFOLIO
11
Portfolio Composition (2014)
MPV, 37%
Pick-Up, 16% Trucks, 16%
HE, 11%
Jeep, 11%
2W, 5%
Others, 5%
Portfolio Composition (2013)
MPV, 36%
Pick-up, 16% Trucks, 17%
HE, 12%
Jeep, 10%
2W, 6%
Others, 4%
MPVs continues to be the largest asset class, with drop in HE yoy due to selective financing because of slowdown in the commodities segment
Rp11,220 bil
* MPV = Multi Purpose Vehicle / 7 seater car, HE includes Heavy equipment and machinery
Rp9,570 bil
Sumatera
53 outlets
20%
Greater Jakarta
36 outlets
20%
Sulawesi and East
51 outlets
Java and Bali
90 outlets
Total 260
Outlets
Kalimantan
30 outlets 12%
STRONG FOOTPRINT OUTSIDE JAVA
13%
12
Business Distribution and Branch Network (2014)
35%
Denotes % Outlets by Region
Continues to expand distribution reach, with redistribution of Receivables toward stronger economics regions
