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PT BFI FINANCE INDONESIA: 9M16 RESULTS
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.
October 2016
* All absolute figures have been rounded to the closest Rp billion and therefore may have some discrepancies with percentage calculations
9M16 KEY UPDATES
2
GROWTH
• Receivables and Revenue growth, amidst economic challenges
• Total Receivables grew 13%
• Net Revenue growth of 12% driven largely by shifting receivables composition to higher yield products
• 3 new outlets in 3Q16
PROFITABILITY
• 9M16 PAT 22% yoy to Rp554 billion, with ability to maintain yields, lower cost of credit and strong receivables growth
ASSET QUALITY
• NPL is 1.75% and Net Write-off is 1.09%
BALANCE SHEET HIGHLIGHTS
3
In Rp bil (unless otherwise stated)
9M16 9M15 YoY FY15 FY14 YoY
New Bookings 7,669 7,844 2.2% 10,058 9,295 8.2%
Managed Receivables^ 12,639 12,439 1.6% 12,229 11,220 9.0%
Total Receivables 11,029 9,781 12.8% 10,078 8,720 15.6%
Total Assets 13,334 14,454 7.8% 11,770 9,683 21.6%
Total Borrowings^ 8,569 10,122 15.4% 9,457 8,039 17.6%
Total Equity 4,197 3,935 6.7% 4,019 3,567 12.7%
^ 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
Continued slowdown in New 4W and HE businesses resulting in slower bookings and receivables growth
• In line with strategy to scale down New 4W business which has shrunk by 80.5% yoy
• Mainly due to strengthening of IDR against USD which affect the amount of derivative financial assets
• No economic value impact from this adjustment
PROFIT & LOSS HIGHLIGHTS
4
In Rp bil (unless otherwise stated)
9M16 9M15 YoY FY15 FY14 YoY
Interest Income 1,873 1,786 4.9% 2,415 1,989 21.4%
Financing Cost (759) (784) 3.2% 1,063 822 29.3%
Net Interest Income 1,115 1,003 11.2% 1,353 1,167 15.9%
Fee Based & Other Income
598 524 14.2% 713 588 21.3%
Net Revenue 1,713 1,526 12.2% 2,066 1,754 17.8%
Operating Expenses (798) (723) 10.3% 968 802 20.7%
Operating Income 916 803 14.0% 1,099 953 15.3%
Cost of Credit (197) (238) 17.5% 263 202 30.0%
PBT 719 565 27.3% 835 751 11.3%
PAT 554 455 21.7% 650 600 8.4%
• Yield improvement of 42 bps YoY attributable to non-dealer financing
• In line with revenue growth
• Includes tax provisions for tax assessment in prior FY
Continued improvements in portfolio yield and Net Interest Margins
* All absolute figures have been rounded to the closest Rp billion and therefore may have some discrepancies with percentage calculations
• Lower interest rates for new borrowings and decrease in total borrowings yoy
• Coming off the top of the delinquency cycle, resulting in lower write-offs
NOTE: Profit & Loss Highlights includes channeling and joint financing activities
KEY RATIOS
5
9M16 9M15 YoY FY15 FY14 YoY
Net Interest Margin 8.63% 8.16% 47 bps 8.20% 7.85% 35 bps
Cost to Income 46.56% 47.38% 82 bps 46.83% 45.84% 99 bps
COC 2.12% 2.64% 52 bps 2.17% 1.94% 23 bps
ROAA** 8.23% 7.20% 103 bps 7.79% 8.35% 56 bps
NPL* 1.75% 1.59% 16 bps 1.33% 1.48% 15 bps
Debt / Equity 1.6x 1.7x 0.1x 1.6x 1.5x 0.1x
* Defined as Pastdue >90 days, Calculated from total managed receivables (included off B/S receivables) ** Calculated as PBT/Average Assets
• Continue focusing on products with higher yields with ability to maintain NIMs
• Continue to show manageable asset quality despite challenging economic conditions
Maintains stable NIM and NPL despite of industry headwind
• Mainly driven by several large Leasing accounts
5,487 7,373 9,570 11,220 12,229
5,742
6,993
8,652 9,295
10,058
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2011 2012 2013 2014 2015
Rp
bil
ABILITY TO BUILD A MORE ROBUST BALANCE SHEET
6
Bookings vs Receivables Growth (2011-9M16)
Sustainable loan and revenue growth over the years – backed by better asset mix
Revenue Growth (2011-9M16)
12,439
12,639
7,844 7,669
9M15 9M16
Bookings Managed Receivables
CAGR B: 15% R: 22% • Able to improve quality and
tenor of loans booked, resulting in consistently faster Receivables growth compared to Bookings
• Slower bookings due to decrease in New 4W and Heavy Equipment financing
1,261 1,582 1,890 2,299 2,831
-
500
1,000
1,500
2,000
2,500
3,000
2011 2012 2013 2014 2015
Rp
bil
Revenue
• Consistently strong growth in Revenue as a result of robust balance sheet
• Shows ability to maximise income generation from assets 2,070 2,360
9M15 9M16
CAGR 22%
* All absolute figures have been rounded to the closest Rp billion and therefore may have some discrepancies with percentage calculations
+14%
2%
STABLE PROFITABILITY OVER THE YEARS
7
PAT Growth ROAA Performance Cost-to-Income*
425 490 509
600 650
455
554
-
100
200
300
400
500
600
700
Rp
bil
11.5%
7.4%
9.0% 8.3%
7.8% 8.2%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2011 2012 2013 2014 2015 2016
42% 42% 45% 45% 46% 45%
0%
10%
20%
30%
40%
50%
60%
70%
2011 2012 2013 2014 2015 9M16
• PAT growth in spite of slowing economy
• Continued 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 in spite of expansion
* G&A + Marketing Expense/Net Revenue * 2016 annualised based on Sep-16 results ** Using PBT/Average Assets
Still one of the most profitable multifinance companies, with ROAs much ahead of the industry
CAGR 11%
ASSET QUALITY UNDER CONTROL
8
NPL Trend (2011-1H16) Write-Offs (2011-1H16)
0.66%
0.82% 0.89%
1.38%
1.83%
1.67%
0.43% 0.52%
0.64%
0.99%
1.38%
1.09%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
1.80%
2.00%
2011 2012 2013 2014 2015 9M16
Gross Write-Off % Net Write-Off %
• Increase in NPL from Heavy Equipment business • In spite of difficult economic and commodities sector conditions, managed to record lower write off than its peers
1.20% 1.05%
1.38% 1.48% 1.33%
1.75%
2.66%
2.18%
2.58%
3.46%
1.58%
4.35%
0.98% 0.85%
1.20% 1.22% 1.30% 1.39%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
2011 2012 2013 2014 2015 9M16
NPL % Leasing NPL% Consumer Financing NPL %
Improved write-offs and manageable NPLs due to rigorous collections and balance sheet management
STRONG CAPITAL BASE
Cost of Funds (2011-9M16)
9
41% 37% 33% 31% 30% 33%
40%
31% 31% 34%
42% 39%
8%
15% 14% 14%
12% 15%
12% 18% 22% 21%
16% 13%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014 2015 9M16
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 (2011-9M16)
12.7%
11.3% 10.6%
11.2% 11.5% 11.4%
6.6% 5.8%
6.5%
7.8% 7.5%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2011 2012 2013 2014 2015 9M16
BFIN Cost of Funds Average BI Rate
* SBI Rate no longer relevant after July 2016
Capital structure more diversified, resulting in better management of borrowing cost and stable NIM
• Cost of fund improving due to cheaper new borrowing rates
2,366 2,862 3,363 3,567 4,019 4,197 Equity
(Rp bil)
10
MINIMUM MARKET RISK EXPOSURE
Interest rate mismatch (Sep-2016)
• Strong balance sheet, consistently showing positive maturity mismatch in assets and liabilities
Maturity mismatch (Sep-2016)
Minimal mismatch – highly resilient to market downturns
• Minimal interest rate exposure - Receivables are in fixed rate, whilst only 3% of total debt have floating interest rate
6,479
3,297
1,904
3,771
2,332
1,380
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1 year 2 years 3 years
Rp
bil
Assets Liabilities
Fixed rate, 97%
Floating rate, 3%
ASSET COMPOSITION
11
Booking Composition (9M15 vs 9M16)
Managed Receivables Composition (9M15 vs 9M16)
14% 3%
18%
19%
48%
54%
9% 11%
9% 11%
2% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
9M15 9M16
Dealer New 4W Dealer Used 4W Non Dealer 4WNon Dealer 2W Leasing - HETO Other
20% 12%
24%
24%
39% 44%
5% 6%
11% 12%
1% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
9M15 9M16
Dealer New 4W Dealer Used 4W Non Dealer 4WNon Dealer 2W Leasing - HETO Other
Continuous effort to shift the business towards higher yield and lower ticket segments
Sumatera
55 outlets
20%
Greater Jakarta
32 outlets
20%
Sulawesi and East
55 outlets
Java and Bali
107 outlets
Total 281
Outlets
Kalimantan
32 outlets 11%
DISTRIBUTION NETWORK
11%
12
Business Distribution and Branch Network
38%
Denotes % Outlets by Region
Current expansion strategy continues in more highly populated and higher income areas
19%
2015 Sep-16
19% 19%
2015 Sep-16
15% 13%
2015 Sep-16
19% 17%
2015 Sep-16
13% 14%
2015 Sep-16
34% 37%
Denotes % Managed Receivables by Region