Home Credit Presentation of 2016 results 1 March 2017
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 www.homecredit.net.
Home Credit – consumer finance leader in growth markets Key metrics and business mix (€) Highlights • 2013 2014 2015 2016 Leading consumer finance lender focused on key growth markets: Deposits (bn) 5.1 2.9 4.9 5.4 − China : the largest and fast growing market with €5.3bn Gross loans (bn) 8.4 6.0 6.6 10.7 of loans Equity (bn) 1.5 1.2 1.2 1.5 − Asia : (Vietnam, Indonesia, India and Philippines) – high growth, Net income (m) 324.4 (60.5) (41.6) 210.2 early stage businesses with the exception Net interest margin 19.8% 18.0% 15.6% 14.0% of Vietnam that is showing strong profitability Cost of risk 16.7% 17.8% 13.2% 7.6% − Russia : historically the largest market with €2.3bn of loans and €2.2bn of customer deposits RoAE 20.5% (4.3%) (3.3%) 16.2% # of distribution points (000) 145 166 186 271 − Other : (Czech Republic, Slovakia and Kazakhstan) which are # of active customers (m) 8.5 9.1 12.5 20.1 mature, profitable businesses • Number1 in point-of-sale lending in most of markets Other Asia Rest CIS • Multichannel customer-centric distribution with 271 thousand 8.9% 7.4% 3.0% distribution points and substantial online presence Czech Republic • 20m customers and 120 thousand employees and Slovakia Cash loans • 10.6% Global footprint covers 10 countries with 3.5bn population Consumer China 50.6% durables 54.5% • Leading edge risk management leveraging big data and biometrics loans Russia 40.5% 23.9% • Strong and diversified funding Total net loan by type: €9.9bn Total net loan by country: €9.9bn 1
Meeting Agenda 1. STRATEGY AND BUSINESS 2. SUMMARY BY COUNTRY 3. KEY FINANCIAL INDICATORS
Home Credit: business highlights Customer-centric multichannel 1 distribution with strong cross-sell Expanding offline Strong and 5 2 footprint and growing diversified funding online distribution Leading edge risk Leading positions in 4 3 management attractive markets 2
Customer-centric multichannel distribution 1 with strong cross-sell Acquisition: POS loan and cash loan walk-in Cross-sell • Existing 70m customer database • 271 thousand distribution points (POS, branches) • Up to 67% of customers eligible for cross-sell within 18 • 300 e-shop agreements Distribution Distribution months • Own websites and mobile apps • Approximately 20% of customers take either cash loan or • Call centres credit card within 36 months. Consumer durables Cash loan Cash loan Credit cards loan Electronics, white goods, General purpose Purpose General purpose General purpose Purpose Two wheelers Products Products €1,750 €1,100* Average amount €320 €390 Average amount Average term 38 months NA Average term 12 months 12 months 5.1 6.5 4.5 3.5 4.2 3.8 Volumes 3.2 2.4 Volumes disbursed (€bn) disbursed (€bn) 2013 2014 2015 2016 2013 2014 2015 2016 * Average credit limit per active credit card 3
Expanding offline footprint and customer 2 base... Number of POS (‘000) 271 24.7% CAGR 19 16 186 166 11 145 7 141 19 6 18 112 38 63 16 2 24 19 14 103 99 94 93 77 2012 2013 2014 2015 2016 Russia China Other(1) Asia Active 6.8 8.4 9.1 12.5 20.1 clients (m) Home Credit helps retailers increase their sales and revenues by making loans easily accessible Coopera rati tion with th Home Credit also works with electronics manufacturers (Samsung, OPPO, Huawei, etc.) to partn tners support their marketing efforts 1 Other includes Czech Republic, Slovakia, Belarus, Kazakhstan 4
…and growing online distribution 2 To date Strategy • • Full usage of our customers’ online digital footprints – through Over 5m online loan applications online risk evaluation, online targeted marketing, and the • Over 700ths contracts sourced via online channels individually tailored products • 5.5m Home Credit app downloads • Grow digital walk-in cash loans by generating initial • 2.5m social media followers leads online • Expand in e-shop loans and digital revolving loans • 300 e-shop partnership agreements signed • Develop innovative products such as our Zonky P2P 5
Leading positions in attractive markets 3 China Vietnam Established High growth GDP growth 6.7% GDP growth 6.2% 1 1 markets Net loans (€m) 5,313 Net loans (€m) 430 Russia Kazakhstan Czech Republic Slovakia Mature markets GDP growth (0.2)% GDP growth 0.2% GDP growth 2.5% GDP growth 3.3% 1 2 1 2 Net loans (€m) 2,326 Net loans (€m) 334 Net loans (€m) 771 Net loans (€m) 258 The Philippines United States of America Indonesia* India Start-up Strategic partnership high growth with Sprint regarding financing services for market 2 GDP growth 7.0% GDP growth 5.0% GDP growth 6.8% new mobile phones 1 2 Net loans (€m) 195 Net loans (€m) 87 Net loans (€m) 68 * Included portfolio which is not on HC books and is financed within JFS Note: Net loans and real GDP growth for 2016 6 Source for GDP: BMI Research
Leading edge risk management 4 Key aspects of risk management Strong risk performance • NPL Highly automated process: 5.2m applications per month 117% 106% 116% 128% coverage • Paperless applications being rolled out • Systematic leverage of big data: 17.8% − Credit bureaus 16.7% − 15.3% Telco databases − Social security databases 13.2% 12.2% − Payment behaviour − Demographic predictors 10.0% − Social media and other sources 7.6% • Proprietary customer database: 70m customers 6.1% • Anti-fraud prevention using biometric measures • Over 80 scoring models • 16 thousand collections FTE’s; 92.3% collections efficiency (1) 2013 2014 2015 2016 • Customer focused risk assessment: median time to yes is 1.04 minutes Cost of risk (2) NPL ratio (3) 1 (1 – (Gross loans DPD 0-90 in previous month / Gross loans DPD 31-120 in current month)) 2 Impairment losses / Average net loans 3 End of period gross loans >90dpd / Total end of period gross loans 7
Strong and diversified funding 5 Div iversified ied fund nding ing Fundin ding g gap ( € bn) n) Funding sources (as of 31 Dec 2016) Net position (as of 31 Dec 2016) 1.3 Equity 10% Other 4% 0.8 0.6 Debt securities 2% Subordinated 0.0 liabilities Bank loans 3% 44% Div iversified ied fund nding ing (1.2) Customer 3m – 1y 1 – 5y <3m >5y No maturity deposits 37% Net position Total: €14.7bn 8
Meeting Agenda 1. STRATEGY AND BUSINESS 2. SUMMARY BY COUNTRY 3. KEY FINANCIAL INDICATORS
China Key financial data (€m) Active clients (000’) Net loans Net profit 53% 5,313 112% 10,621 196 139% 100% (15)% 128 110% 103% 5,002 64% 2,219 42% 75 64 2,468 1,057 1,736 644 2013 2014 2015 2016 2013 2014 2015 2016 #1 in 2013 2014 2015 2016 POS Market opportunity (consumer lending) (€bn) (1) Number of POS 8.3% 9.4% 11.1% 12.7% % of GDP 141,315 1,334 1,078 63,391 847 686 37,793 24,001 2013 2014 2015 2016 2013 2014 2015 2016 National roll out progressing as per plan combined with a densification of the network Strong growth combined with strong profitability 1 Euromonitor 9
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