jtrust olympindo - jt-corp.co.jp · olympindo multi finance is incredibly well-known as a...
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Copyright(C)2018 JTRUST Co.,Ltd. All Rights Reserved.
JTrust Olympindo
December 2018
Multi Finance
J Trust Co., Ltd.
22
Key Points
• J Trust acquired 60% of shares of Olympindo Multi Finance, a multi-finance company. JTrust Olympindo Multi Finance(hereafter, ”JTO”) became a consolidated subsidiary in October 2018.
• In addition to used auto loans, JTO has added new services such as farm equipment loans and multipurpose loans.
• Through a joint finance arrangement with Bank J Trust Indonesia, JTO will pursue a strategy to expand its business through stable funding and improve profit margin through better capital efficiency.
44
Previously, the funding environment had been degrading across the entire industry.
9.40%
5.76%
8.17%
11.11%10.03%
13.12%12.31%
7.69%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
15/01 15/07 16/01 16/07 17/01 17/07 18/01 18/07
Cost of Funds & Market Interest Rate
3 year govt. bonds JTO All finance companies
Sources:Compiled by J Trust using data from Bloomberg
55
The performance declined up until December 2017 under the weak business environment.
24,644 25,259
17,978
23,599
11,948
1.49% 1.45% 1.13% 0.97%0.39%
9.60%
8.28%
5.86% 6.12%
2.51%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
0
5,000
10,000
15,000
20,000
25,000
30,000
2013/12 2014/12 2015/12 2016/12 2017/12
Past Results of Olympindo Multi FinanceOperating profit ROA ROEUnit: 10 million IDR
Reference rate: 1 IDR=0.0079 JPY(Current rate as of November 30th, 2018)
Results from FY 12/2015 onward have been completely audited.
66
New contracts increased from around the time that JTO became J Trust’s subsidiary.
19,100
29,970
19,769
33,612
51,860 52,152
55,696
230
332
212
359
421 427
519
0
100
200
300
400
500
600
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
2018/04 2018/05 2018/06 2018/07 2018/08 2018/09 2018/10
Status of Recent New Loans at Olympindo Multi FinanceMonetary amount Number of loansUnit: 10 million IDR Number of loans
77
Enhancing products and services
• In addition to used auto loans, originate new auto loans in partnership with TATA
• Reopen deals with dealers that JTO had become distant from, especially large-scale dealers
• Offer competitive services through reduced screening time
• Begin farm equipment financing in partnerships with Kubota, YANMAR and KIOTI
• Consider offering home remodeling and educational loans
8
Channel and Product Strategies • Shift to large-scale automobile dealers in major cities• Center new auto loans on commercial vehicles, while centering
used auto loans for individual customers• Shift target of used auto loans to models produced within the past
ten years• For farm equipment loans, expand branch network through low-
cost Point of Sales. Cost Reduction
• Improve efficiency of administrative expenses by expanding the size of business, while maintaining number of employees
• Improve capital efficiency utilizing joint finance arrangement with Bank J Trust Indonesia
8
Improving profit margin
9
Strengthening collections • Concentrate collection channels in call centers• Performance-oriented visit collection
Strengthening compliance• Task management with stronger discipline• Holding educational workshops• Send compliance officers to all branches
9
Improving profit margin Pt. 2
10
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
-50
0
50
100
150
200
250
300
350
400
2018/12 2019/12 2020/12 2021/12 2022/12 2023/12
Operating Profit and Loans OutstandingJTO loan balance Portion of BJI joint finance Operating profit
10
Mid-term Plan (using local accounting standards)
Loans outstanding and credit costs may differ in IFRS due to accounting methods.
Unit: 1 billion IDRUnit: 1 billion IDR
1111
Improving capital efficiency through joint finance with Bank J Trust
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
0
500
1,000
1,500
2,000
2,500
2017/12 2018/12 2019/12 2020/12 2021/12 2022/12 2023/12
JTO Future Loan Balance and Equity RatioJTO loan balance Equity ratioUnit:1 billion IDR
1212
Mid-term Plan (using local accounting standards)
Loans outstanding and credit costs may differ in IFRS due to accounting methods.
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
-50
0
50
100
150
200
250
300
2018/12 2019/12 2020/12 2021/12 2022/12 2023/12
JTO Annual Profit Plan and ROA & ROEAnnual Profit Contribution to J Trust ROA ROEUnit: 1 billion IDR
1313
Current Target and Total Assets, Profit and ROA compared with competitors
OTO Moter
Clipan Finance Indonesia
Andalan Finance Indonesia
Adira Multi Finance
Mandiri Tunas Finance
BCA Finance
Olympindo17/12
JTO 19/12
JTO 20/12
JTO 21/12
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
-400 -200 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800
Olympindo Compared to Competitors in the Same Industry
(Annual profit in billions of rupiah)
Source: Compiled by J Trust based on public data from each company
18.0%
(ROA)
15
History and Summary of Business • 1974 Founder began business selling used automobiles• 1987 Through the establishment of a sales company which owns a
license for installment payments, founded Olympindo Multi Finance, which owns a license for multi-finance, in 1993
15
Summary of Business
Olympindo Multi Finance is incredibly well-known as a multi-finance company that finances used automobiles and one that has built strong relationships of trust with many used auto dealers through a network of over forty locations across Indonesia’s five main islands.
40 locations openedas of late March 2018
With short settlement periods and speedy credit and screening processes, the company has increased its profits while elevating its market share.
16
Comparison of Asset Based Profitability With Competitors 1
1.36% 1.49% 0.72% 0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
2015/12 2016/12 2017/12
Jtrust Olympindo Multi Finance
2.38% 2.73% 2.41% 0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
2015/12 2016/12 2017/12
OTO Motor Group
5.98% 4.20% 3.41% 0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
2015/12 2016/12 2017/12
Clipan Finance Indonesia
3.46% 6.46% 7.79%0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
2015/12 2016/12 2017/12
Adira Dinamika Multi Finance
Sources:Compiled by J Trust from online materials such as annual reports
General operating expenses Credit costs Interest expense Earnings before tax Leverage (X)
17
Comparison of Asset Based Profitability With Competitors 2
4.45% 4.03% 3.23% 0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
2015/12 2016/12 2017/12
Mandiri Tunas Finance
24.14% 22.02%26.63%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
2015/12 2016/12 2017/12
BCA Finance
Adira Dinamika Multi Finance Mandiri Tunas Finance BCA Finance% to operating assets 2015/12 2016/12 2017/12 2015/12 2016/12 2017/12 2015/12 2016/12 2017/12
General operating expenses 14.60% 11.70% 13.06% 6.34% 5.85% 5.47% 11.02% 11.58% 12.41%Credit costs 6.83% 6.22% 6.10% 3.13% 3.83% 3.06% 0.66% 0.53% 0.83%Interest expenses 6.09% 7.30% 6.59% 7.62% 8.27% 7.15% 5.24% 4.30% 3.14%Earnings before tax 3.46% 6.46% 7.79% 4.45% 4.03% 3.23% 24.14% 22.02% 26.63%Leverage (X) 6.36 5.55 5.13 7.85 7.74 8.34 3.12 2.81 2.17
Jtrust Olympindo OTO Moter G Clipan Finance Indonesia% to operating assets 2015/12 2016/12 2017/12 2015/12 2016/12 2017/12 2015/12 2016/12 2017/12
General operating expenses 8.53% 4.81% 5.85% 6.15% 6.33% 7.29% 2.67% 3.02% 3.53%Credit costs 2.64% 1.80% 2.61% 1.68% 1.93% 2.56% 2.75% 3.60% 3.37%Interest expenses 9.51% 8.97% 11.73% 6.51% 6.43% 5.90% 5.65% 4.92% 3.98%Earnings before tax 1.36% 1.49% 0.72% 2.38% 2.73% 2.41% 5.98% 4.20% 3.41%Leverage (X) 5.42 6.28 6.40 3.69 3.62 3.66 1.85 1.78 2.45
Sources:Compiled by J Trust from online materials such as annual reports
General operating expenses Credit costs Interest expense Earnings before tax Leverage (X)
1818
Position in the Multi-Finance Industry (Bubble Chart)
Astra Sedaya Finance
Federal International Finance
Central Java Power
Adira Dinamika Multi Finance
OTO MultiarthaToyota Astra Financial Services
DIPO Star Finance BFI Finance Indonesia
Mandiri Tunas Finance
Summit OTO Finance
Indomobil Finance Indonesia
BCA Finance
Olympindo FY03/2015
Olympindo FY03/2016Olympindo FY03/2017-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
-500 0 500 1,000 1,500 2,000 2,500 3,000
Size of Assets at Top Multi-Financing Companies and Position of Olympindo
(Annual profit in billions of rupiah)
※As of December 2017
Source: Compiled by J Trust using data from Biro Riset Infobank(Infobank Research Lab) Olympindo data listed following audit adjustment in March
14.0%
(ROA)
1919
Position in Multi-Finance Industry (Chart) ※ As of December 2017
No. Company name Net profit ROA Total AssetsUnit: 1 billion IDR
1 Astra Sedaya Finance 934 2.97% 31,478
2 Federal International Finance 1,806 6.14% 29,411
3 Central Java Power 2,239 7.75% 28,908
4 Adira Dinamika Multi Finance 1,009 3.65% 27,643
5 OTO Multiartha 452 1.97% 22,957
6 Toyota Astra Financial Services 351 1.58% 22,201
7 DIPO Star Finance 458 3.61% 12,679
8 BFI Finance Indonesia 798 6.40% 12,476
9 Mandiri Tunas Finance 335 2.94% 11,404
10 Summit OTO Finance 281 2.68% 10,495
11 Indomobil Finance Indonesia 90 0.96% 9,415
12 BCA Finance 1,139 13.97% 8,152
44 Olympindo Multi Finance 17 0.98% 1,727
Source:Data from Biro Riset Infobank(Infobank Research Lab)