2014년 1분기 ir 자료 en final
- 1. Hyundai Capital ServicesHyundai Capital Services Investor Presentation (1Q 2014)
- 2. Disclaimer These presentation materials have been prepared by Hyundai Capital Services., Inc. (“HCS or the Company”), solely for the use at this presentationThese presentation materials have been prepared by Hyundai Capital Services., Inc. (“HCS or the Company”), solely for the use at this presentation and have not been independently verified. No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented or contained in this presentation. Neither the Companies nor any of theirs affiliates, advisers or representatives accepts any responsibility whatsoever for any loss or damage arising from any information presented or contained in this presentation. The information presented or contained in this presentation is current as of the date hereof and is subject to change without notice and its accuracy is not guaranteed. Neither the Companies nor any of their affiliates, advisers or representatives make any undertaking to update any such information subsequent to the date hereof. This presentation should not be construed as legal, tax, investment or other advice. Certain information and statements made in this presentation contain “forward-looking statements.” Such forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “considering,” “depends,” “estimate,” “expect,” “intend,” “plan,” “planning,” “planned,” “project,” “trend,” and similar expressions. All forward-looking statements are the Companies’ current expectation of future events and are subject to a number of factors that could cause actual results to differ materially from those described in the forward-looking statements. Caution should be taken with respect to such statements and you should not place undue reliance on any such forward-looking statements. Certain industry and market data in this presentation was obtained from various trade associations, and the Companies have not verified such dataCertain industry and market data in this presentation was obtained from various trade associations, and the Companies have not verified such data with independent sources. Accordingly, the Companies make no representations as to the accuracy or completeness of that data, and such data involves risks and uncertainties and is subject to change based on various factors. This presentation does not constitute an offer or invitation to purchase or subscribe for any shares or other securities of the Companies and neither any part of this presentation nor any information or statement contained therein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. Any decision to purchase shares in any offering of shares of the Companies should be made solely on the basis of the information contained in the offering document which may be published or distributed in due course in connection with any offering of shares of the Companies, if any. The contents of this presentation may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose.
- 3. Finance Business of Hyundai Motor GroupFinance Business of Hyundai Motor GroupFinance Business of Hyundai Motor GroupFinance Business of Hyundai Motor Group Main Business Structure of HMG Car MakerCar Maker Auto PartsAuto Parts Captive Finance Arms in HMG HMG FinanceFinance HCA (US)Best Practice Joint Venture Full Ownership HCSHCSHCSHCS (Korea) 3 SteelSteelConstructionConstruction (US)Best Practice(Korea) HCUK (UK) BHAF (China) * HCS receives management consulting fee from overseas entities
- 4. HCS HCA HCUK BHAF Established 1993 (JV since 2004) 1989 2012 2012 HMG Captive Finance CompaniesHMG Captive Finance CompaniesHMG Captive Finance CompaniesHMG Captive Finance Companies Regional Coverage Korea U.S.A U.K. China Shareholders HMC 56.5% GECC 43.3% HMA 80% KMA 20% HCS 30% Santander UK 50% HMUK 10% KMUK 10% HCS 46% BAI 33% BHMC 14% HMC 7% Financial KRW 20.4Tn GBP 693Mn RMB 4,011Mn 4 Financial Receivables* KRW 20.4Tn (USD 19.3Bn) USD 20.9Bn GBP 693Mn (USD 950Mn) RMB 4,011Mn (USD 643Mn) Products Auto Finance (New car, Used car) P-loan Mortgage Auto Finance (New car, Used car) Floor Plan VSC Auto Finance (New car, Used car) Floor Plan Auto Finance (New car) * As of Dec. 2013
- 5. HCS Roles among HMG Captive Finance CompaniesHCS Roles among HMG Captive Finance CompaniesHCS Roles among HMG Captive Finance CompaniesHCS Roles among HMG Captive Finance Companies Activities Purpose Dispatching Managerial Personnel • Leverage HCS’s expertise and know-how as a finance co. • Dispatched top management personnel including CEOs, CFOs, CROs to HCA, HCUK and BHAF Current Status Management Know-how Transfer • Reinforce business competency with overall business management support • Participate in top decision-making bodies such as BoD, EFC • Review global monthly performance (i.e. Sales, Profits, Funding, Risk profile) • Full time management issue discussion Setting Global Protocol • Implant DNA as a global one company • Organize Global Auto / Risk Forum • Implement identical schemes for HR / Corporate culture (i.e. Global Job Posting, same compliance policy) 5 same compliance policy) Market Research / Managing Incorporation • Build a foundation of long-term global business expansion • Proceeding incorporation of 2 finance companies (Canada, Germany) • Operate 5 advisory offices (Europe, Germany, Brazil, Russia, India) Reinforce Strategic Global Partnership • Create overseas business synergy through reinforcing regional partnership • Alliance with major FIs: Santander, Societe Generale, BNP-Paribas, etc.
- 6. Solid Global Sales Base Superior Management DNA Shareholding Structure and Strengths of HCSShareholding Structure and Strengths of HCSShareholding Structure and Strengths of HCSShareholding Structure and Strengths of HCS • Structural advantage as a captive finance company of HMG providing solid sales base with 56.5% 10 years Joint Venture between HMC and GE Capital 43.3% 6 • Structural advantage as a captive finance company of HMG providing solid sales base with a dominant market position in the domestic market • Superior performance based on the successful Joint venture structure • Inheritor of GE’s business management know-how • Unparalleled corporate culture embodied in the organization • Business synergy among 4 Hyundai Finance Companies (Capital, Card, Commercial, Life)
- 7. HCS Market PositionHCS Market PositionHCS Market PositionHCS Market Position • Total Industry Asset : KRW 48 Tn Dominant Position in Industry* HCS’s leading position • Top credit rating in industry • Only company to issue global bonds • Incomparable profitability (as of 2013) AA+ • Total Industry Op. Income : KRW 795 Bn • Incomparable profitability (as of 2013) – ROA: 1.9% Vs. Industry Average 1.2% – ROE: 12.1% Vs. Industry Average 8.3% • Superior asset quality (as of 2013) – 30 days + DQ: 2.4% Vs. Industry Average 3.1% HCS & Competitors’ Domestic Credit Ratings OthersOthersOthersOthers 33%33%33%33% BBBB 9%9%9%9% AAAA 11%11%11%11% HCSHCSHCSHCS 47%47%47%47% 7 Source: Financial Statistics Information System, at end of 2013 * Installment Finance Industry AA- A+ A+ HCS Company A Company B Company C OthersOthersOthersOthers 29%29%29%29% BBBB 6%6%6%6%AAAA 10%10%10%10% HCSHCSHCSHCS 55%55%55%55%
- 8. Macro EconomyMacro EconomyMacro EconomyMacro Economy GDP Growth Rate & Unemployment Rate 2010 2011 2012 2013 1Q14 2014(e) GDP Growth Rate 6.1% 3.6% 2.0% 2.8% 3.9% 4.0% Source: Bank of Korea * Seasonal adjustment rate Unemployment Rate 3.7% 3.4% 3.2% 3.1% 3.5%* 3.2% Macro & Car sales: Direct Macro & Delinquency: Inverse 20% 30%8% GDP growth rate (left) New car sales growth rate (right) 3%8% GDP growth rate (left) HCS Delinquency ratio (right) 8 -10% 0% 10% 20% 0% 4% '06 '07 '08 '09 '10 '11 '12 '13 1% 2% 0% 4% '06 '07 '08 '09 '10 '11 '12 '13
- 9. Domestic Auto Market and HMG’s PositionDomestic Auto Market and HMG’s PositionDomestic Auto Market and HMG’s PositionDomestic Auto Market and HMG’s Position HMC KMC Others Imported HMG M/S (Unit: ‘000s) Saturated Auto Sales Market, Yet Dominant Market Position of HMG 413 485 493 482 313 322 267 279 321 297 261 285 41 53 62 61 91 105 131 156 1,205 1,273 1,216 1,455 1,556 1,580 1,542 1,540 71% 71% 73% 77% 74% 75% 75% 71% 73% 70% 9 Source: KAMA 581 625 571 703 660 684 668 640 271 272 316 413 485 493 482 458 '06 '07 '08 '09 '10 '11 '12 '13 154 161 109 108 61 6935 44 359 382 1Q13 1Q14
- 10. Key Features of Korean Consumer Finance MarketKey Features of Korean Consumer Finance MarketKey Features of Korean Consumer Finance MarketKey Features of Korean Consumer Finance Market Conservative Auto Finance Structure Strong Credit Infrastructure • Finance transactions centrally collected (Banks, Credit card, Non-bank FIs, Insurance) • Extensive information for sequential analysis 70% 30% New car purchase price Residual value of used car Down payment Rigorous Regulation • Exclusive organizations within FSS: capital market supervisory and investigation • Extensive information for sequential analysis (default and good credit) • i.e. customer profile(job, income, etc), Accounts(loans, credit transaction and limits, etc), history (payment, card usage), delinquency (amount, payment schedule, etc) 10 70% 50% Origination Year-3 capital market supervisory and investigation • Quarterly management of capital adequacy, leverage, loan ratio, LTV, NPL and etc. • Frequent supervision on information security and customer satisfaction/protection • Regular (every 3 year) and irregular (when necessary) business assessment
- 11. Asset PortfolioAsset PortfolioAsset PortfolioAsset Portfolio Others Receivables Breakdown by Product • Financial Receivables : KRW 20.3Tn New Car 51.5% Auto Used Car 7.4% P. Loan 10.1% Mortgage 8.8% Others 2.5% (Approx. USD 19.0 Bn) • Auto-centric asset composition • Key features by product Product Key Features New Car Captive business Auto Lease 11 Auto Lease 19.7% Auto Lease Used Car 100% pledge P.Loan Driven by X-selling Mortgage Risk hedged by Insurance
- 12. Revenue and ProfitRevenue and ProfitRevenue and ProfitRevenue and Profit 2012 2013 1Q 13 1Q 14 YoY Operating Revenues 3,542 3,222 921 789 -14.3% (unit: KRW Bn) • Decrease in operating revenues – Up-front fee revocation for New cars – Personal loan Telemarketing banned (excl. FX effect) 3,071 2,921 722 683 -5.4% Operating Expenses 2,947 2,787 802 711 -11.3% (excl. FX effect) 2,477 2,487 603 606 0.4% Interest expenses 895 801 204 195 -4.5% Bad Debt expenses 377 453 101 119 17.9% Operating Income 595 435 119 77 -34.8% – Personal loan Telemarketing banned for 1 month (industry wide) • Expense maintained at similar level – Declined interest expenses from lower funding rate offset by increase in bad debt expenses • One time non-operating income 12 Non-operating Income -5 89 89 -22 -124.7% Net Income 437 391 153 31 -79.7% ROA 2.2% 1.9% 3.0% 0.6% -2.4% ROE 14.8% 12.1% 19.7% 3.7% -16.0% – 1Q 13: Gain from disposal of HQ office buildings (KRW 85 Bn) – 1Q 14: Recorded appraisal loss for HK Savings Bank (KRW 28 Bn) – Profitability excl. appraisal loss : ROA 1.15%, ROE 7.13%
- 13. Stable Asset Quality and ReserveStable Asset Quality and ReserveStable Asset Quality and ReserveStable Asset Quality and Reserve Excl. Purchased NPL Incl. purchased NPL 30+ Delinquency Ratio Maintained Low Well Maintained Reserve (unit: KRW Bn) Allowance for bad debt Reserve 30+ Delinquency Coverage 1.6% 2.0% 2.3% 2.4% 2.6% 2.5% 2.7% 2.8% • Denominator effect from asset decrease 265 280 326 326 474 610 665 763 779 158% 151% 145% 154% 150% 30+ Delinquency Coverage 13 '10 '11 '12 '13 1Q14 • Denominator effect from asset decrease - 1 mo. halt on p.loan TM, now normalized • Increase in imported lease DQ and asset decrease - Operation withdrew since February 345 385 437 453 265 '10 '11 '12 '13 1Q14
- 14. Characteristics of HCS Risk ManagementCharacteristics of HCS Risk ManagementCharacteristics of HCS Risk ManagementCharacteristics of HCS Risk Management • Major decision regarding Risk • Systematic response to Business Cycle Multi-layered Risk Management Framework Governance Strategy Infrastructure Major decision regarding Risk • Controlling Risk limits • System • Analytic models Systematic response to Business Cycle • Profit & Risk Optimization • Support new business growth • Monitor major Risk Indexes • Risk Model & Score Validation i.e. – Risk Control Committee – New Product Introduce – Credit Review Point i.e. – Risk Based Pricing – Residual Value Insurance – Collection Channel Optimization 14 Monitoring Infrastructure• Analytic models • Information • Risk Model & Score Validation • Operation Risk Minimize i.e. – Maturity Expected Loss – Economic Capital – Anti-Fraud System – Collection scoring system i.e. – Portfolio Quality Review – Risk Appetite Monitoring – Stress Test – Contingency Plan
- 15. Diversified Funding by Type, Duration & RegionDiversified Funding by Type, Duration & RegionDiversified Funding by Type, Duration & RegionDiversified Funding by Type, Duration & Region Funding Portfolio by Product 64.3% KRW Funding Portfolio by Currency Domestic Bond 49.8%Foreign Bond 28.3% CP 1.4% Loans 8.1% ABS 12.4% 1.4% 3.3% 3.6% 4.6% 22.8% MYR AUD JPY CHF USD 15 • Total balance : KRW 18.1Tn • Product mix guidelines : ABS 20%, CP 10% • ALM ratio :143% • % of Long-term debt : 73.3% • Major Overseas Funding in 1Q 2014 – 144A/RegS Bond: USD 500Mn, 3y FRN
- 16. Sound Capital Structure StrengthenedSound Capital Structure StrengthenedSound Capital Structure StrengthenedSound Capital Structure Strengthened Improved Capital Profile (Unit: KRW Bn) Capital Adequacy Ratio / Leverage 2,261 2,658 3,031 3,235 3,274 13.7% 13.0% 14.5% 15.1% 15.5% Regulation: Over 7% Regulation: Under 8X (Since 2012) 16 '10 '11 '12 '13 1Q 14 9.3 x 8.3 x 7.2 x 6.6 x 7.0 x '10 '11 '12 '13 1Q 14 * Separate financial sheet
- 17. Liquidity Profile (unit: KRW Bn) Strong Liquidity Position and Contingency PlansStrong Liquidity Position and Contingency PlansStrong Liquidity Position and Contingency PlansStrong Liquidity Position and Contingency Plans Contingency Framework Crisis Detection • Daily monitoring of key market indicators (Early Warning System) Credit-lineCash Short-term Debt Coverage Ratio* Stress Test Liquidity Management Decision Body Normal • FC (Funding Committee) • ALCO (Asset Liability Committee) • EFC (Executive Finance Committee) • Short term 1M 2,511 2,480 2,345 2,3502,365 3,808 3,580 3,649 4,102 39.1% 63.5% 69.2% 73.7% 84.8% 17 * Short-term Debt Coverage Ratio = (Cash + Unused committed credit line)/ Short-term debt balance Volatile Actions • Contingency funding • Asset slow down (Sales) • Crisis communication • Contingency monitoring • Long term 12M 1,027 1,297 1,100 1,304 1,752 1,338 '10 '11 '12 '13 1Q14
- 18. Credit RatingsCredit RatingsCredit RatingsCredit Ratings HCS’ Global Credit Ratings Credit Rating Rationale •Strong Standalone Profile –Strong market position as HMC's Agency Rating Features –Strong market position as HMC's captive finance arm –Sustainable track record of strong profit performance and robust credit fundamentals –Adequate liquidity and sound capitalization •Capable & Willing Shareholder Support S&P BBB+ (P) Equalized with HMCMoody’s Baa1 (S) Fitch BBB+ (S) 18 •Capable & Willing Shareholder Support -Strong performance of HMC -Willingness of support from the shareholders proven in history JCR A+ (S) Equalized with sovereign rating RAM AAA The highest rating
- 19. InvestmentInvestmentInvestmentInvestment HighlightsHighlightsHighlightsHighlights • Value Proposition of HCS – Captive company of HMG in Korea and leader of global business – Dominant market position based on the successful JV structure between HMC and GECC • Key Financials of 1Q 2014 – Financial Receivables : KRW 20.3 Tn – Operating Income : KRW 77.5 Bn – Dominant market position based on the successful JV structure between HMC and GECC – Stable and solid fundamental proven in history – Unparalleled corporate culture driving ceaseless change 19 – Operating Income : KRW 77.5 Bn – 30+ Delinquency Ratio : 2.8% (Excl. Purchased NPL, 2.6%) – Leverage : 7.0X – Credit Ratings : S&P BBB+ (P) / Moody’s Baa1 (S) / Fitch BBB+ (S)
- 20. Further InformationFurther InformationFurther InformationFurther Information 20 IR Homepage : http://ir.hyundaicapital.com IR email address : irhcs@hyundaicapital.com