Home Credit Presentation of 3Q 2017 results 27 November 2017 - - PowerPoint PPT Presentation

Home Credit

Presentation of 3Q 2017 results 27 November 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

• pinion 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

Highlights Key metrics and business mix (€)

• HC has experienced high growth rates in its key regions:

− China and Vietnam: fast-growing and profitable markets with the new volume growing by 127% and 59%, respectively − Other Asian businesses: (Indonesia, India and Philippines) – all three businesses pursuing a rapid expansion setting themselves for a good trajectory to break-even − Russia: fully recovered from crisis, growing again the loan portfolio and achieving strong profits − Other: (Czech Republic, Slovakia and Kazakhstan) which are mature businesses

• Number 1 in point-of-sale lending in most of markets
• Multichannel customer-centric distribution with 399 thousand

distribution points and substantial online presence

• 28.7m customers and 155 thousand employees
• Global footprint covers 10 countries with 3.5bn population
• Leading edge risk management leveraging big data and biometrics
• Strong and diversified funding

Total net loan : €13.9bn

1

China 63% Russia 17% CZ & SK 9% Asia 8% Rest CIS 3% Cash loans 37% Consumer durables loans 56% Other 6%

2015 2016 2016 Q3 2017 Q3 Deposits (bn) 4.9 5.4 5.0 6.3 Gross loans (bn) 6.6 10.7 8.8 15.0 Equity (bn) 1.2 1.5 1.3 1.7 Net income (m) (41.6) 210.2 131.4 231.9 Net interest margin 15.6% 14.0% 14.1% 14.2% Cost of risk 13.2% 7.6% 8.0% 7.7% RoAE (3.3%) 16.2% 14.1% 19.5% # of distribution points (000) 186 271 241 399 # of active customers (m) 12.5 20.1 16.8 28.7

Ratios annualized where applicable.

Meeting Agenda

1. STRATEGY AND BUSINESS 2. SUMMARY BY COUNTRY 3. KEY FINANCIAL INDICATORS

Customer-centric multichannel distribution with strong cross-sell Responsible lending at the heart

• f our practices

Leading positions in attractive markets Strong and diversified funding Leading edge risk management

Home Credit: business highlights

1 2 3 4 5

2

Customer-centric multichannel distribution with strong cross-sell

Acquisition: POS and cash loan walk-in Cross-sell 1

Distribution

• 399 thousand distribution points (POS, branches)
• 300 e-shop agreements
• Own websites and mobile apps
• Call centres

Products Consumer durables loan Cash loan Purpose Electronics, white goods, Two wheelers General purpose Average amount €322 €572 Average term 11 months 16 months Volumes disbursed (€bn) Distribution

• Existing 90m customer database
• Up to 66% of customers eligible for cross-sell within 18

months

• From 16% to 20% of customers take either cash loan
• r credit card within 36 months.

Products Cash loan Credit cards Purpose General purpose General purpose Average amount €1,942 €1,105* Average term 33 months NA Volumes disbursed (€bn)

3

1,7 3,1 6,3 2,4 4,5 2015 2016 2017 3Q Full year

*Average credit limit per active credit card

2,4 4,2 8,1 3,8 6,5 2015 2016 2017 3Q Full year

77 99 103 93 94 101 19 24 38 63 141 244 14 16 18 19 16 13 2 6 7 11 19 40 112 145 166 186 271 399 2012 2013 2014 2015 2016 2017 Q3 Russia China Other(1) Asia

Expanding offline footprint and customer base...

Home Credit helps retailers increase their sales and revenues by making loans easily accessible Home Credit also works with electronics manufacturers (Samsung, OPPO, Huawei, etc.) to support their marketing efforts Cooperation with partners

Number of POS (‘000)

Active clients (m) 6.8 8.4 9.1 12.5 20.1

1

1 Other includes Czech Republic, Slovakia, Belarus, Kazakhstan

4

28.7

…and growing in Online

Growth in Sales Growth in Mobile applications penetration

5

1 1 Social Media followers : 4,963,056

GDP growth 3.3% Net loans (€m) 228 GDP growth (0.2)% Net loans (€m) 2,377 GDP growth 0.2% Net loans (€m) 392

Leading positions in attractive markets

2

Established High growth markets Mature markets Start-up high growth market

Vietnam

1 1

China

1

Czech Republic

2

Slovakia

1

Russia

2

Kazakhstan

GDP growth 6.2% Net loans (€m) 516 GDP growth 6.7% Net loans (€m) 8,698 GDP growth 2.5% Net loans (€m) 903

Indonesia* India

2

new

United States of America The Philippines

1

GDP growth 6.8% Net loans (€m) 142 GDP growth 5.0% Net loans (€m) 173

Strategic partnership with Sprint regarding financing services for mobile phones

GDP growth 7.0% Net loans (€m) 364

Note: Net loans for 2017 Q3 and real GDP growth for 2016 Source for GDP: BMI Research

6

*Included portfolio which is not on HC books and is financed

within JFS

1

Leading edge risk management

• Highly automated process: 5.5m applications per month
• Paperless applications roll-out progressing
• Systematic leverage of big data
• Proprietary customer database: 90m customers
• Anti-fraud prevention using biometric measures
• Over 80 scoring models
• 22 thousand collections FTE’s; 93.3% collections efficiency(1)
• Customer focused risk assessment: median time to yes is less than

1 minute

• Risk based pricing introduced progressively

Key aspects of risk management Strong risk performance

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

NPL coverage

3

7

128% 116% 106% 117% 16,7% 17,8% 13,2% 7,6% 7,7% 12,2% 15,3% 10,0% 6,1% 6,2% 2013 2014 2015 2016 2017 Q3 Cost of risk (2) NPL ratio (3) 120%

Diversified funding Interest rate gap profile (€m)

Strong and diversified funding

Div iversified ied fund nding ing

Total: €19.5 bn

Funding sources (as of 30 September 2017)

8

4

Interest position (as of 30 September 2017)

Customer deposits 33% Loans received 48% Debt securities 5% Subordinated liabilities 2% Other 4% Equity 9%

763 3 337 4 073 3 864 5 385 4 113 2 269 1 187 595 706

• 3 398 -3 580 -2 039
• 5 458
• 2 502
• 1 378
• 298
• 312
• 641

Liabilities Assets Gap

Responsible lending at the heart of our practice

5 Our principles

• Home Credit prides itself on being a responsible lender and an active participant in the communities in which it operates.
• We practice in Financial Inclusiveness. Traditional lenders often do not adequately cater to the needs of those on lower incomes or

first-time borrowers. The need for a developed credit history and collateralization are common barriers for individuals who would benefit from using formal financial services. This exclusion can have a detrimental effect on their financial and personal well-being, and hinders economic and social development.

• We invest in financial Literacy. Educating our customers and the communities in which we operate is the foundation of our sustainability

programme.

• To help ensure customers make the right borrowing decisions based on their own circumstances, we have introduced a cooling-off

period as standard across all our operations.

• Our Safety Guarantee provides options for struggling clients to offer them additional time for repayment, payment holidays, late penalty

waivers etc.

9

Meeting Agenda

1. STRATEGY AND BUSINESS 2. SUMMARY BY COUNTRY 3. KEY FINANCIAL INDICATORS

847 1 078 1 334 2014 2015 2016 2 219 5 313 6 506 7 735 8 698 2015 2016 2017 Q1 2017 H1 2017 Q3 128 196 122 118 2015 2016 2016 Q3 2017 Q3

China

Key financial data (€m) Active clients (000’) Number of POS

Market opportunity (consumer lending) (€bn)(1)

Net loans Net profit (YTD) % of GDP 12.7% 11.1% 9.4%

1 Euromonitor

10

5 002 10 621 13 189 15 866 16 864 2015 2016 2017 Q1 2017 1H 2017 Q3 63 391 141 315 178 321 225 413 244 466 2015 2016 2017 Q1 2017 H1 2017 Q3

POS market position strengthening thanks to product offering and relationship with retailers. Massive expansion of POS distribution network

#1 in POS

18 22 26 2014 2015 2016 1 129 1 769 1 907 1 829 1 827 2015 2016 2017 Q1 2017 H1 2017 Q3 26 46 33 52 2015 2016 2016 Q3 2017 H3 249 430 464 474 516 2015 2016 2017 Q1 2017 H1 2017 Q3

Vietnam

Key financial data (€m) Active clients (000’) Number of POS

Market opportunity (consumer lending) (€bn)(1)

#1 in POS

% of GDP 13.6% 12.7% 11.2%

1 Euromonitor

12

4 955 6 834 7 376 8 030 8 687 2015 2016 2017 Q1 2017 H1 2017 Q3 Net loans Net profit (YTD)

Volumes increasing rapidly through a growing portfolio of products Business benefiting from its prominent position with key retailers

1 957 2 326 2 405 2 269 2 377 2015 2016 2017 Q1 2017 H1 2017 Q3

Russia

Key financial data (€m) Active clients (000’) Number of POS Market opportunity (consumer lending) (€bn)(1) #1 in POS

% of GDP 6.3% 6.7% 8.1%

1 The Central Bank of the Russian Federation

13

(146) 67 37 130 2015 2016 2016 Q3 2017 H3 3 723 3 268 3 308 3 185 3 272 2015 2016 2017 Q1 2017 H1 2017 Q3 92 980 93 996 94 038 97 131 100 909 2015 2016 2017 Q1 2017 H1 2017 Q3 na 91 88 2014 2015 2016 Net loans Net profit (YTD)

Improvement of macroeconomic environment easing pressures on retail lending Digitalization of the business contribute to higher efficiency and higher profitability

260 334 357 363 392 2015 2016 2017 Q1 2017 H1 2017 Q3 34 46 30 46 2015 2016 2016 Q3 2017 Q3

Kazakhstan

Key financial data (€m) Active clients (000’) Number of POS

Market opportunity (consumer lending) (€bn)(1)

#1 in POS

% of GDP 5.6% 6.4% 6.5% 1 National Bank of Kazakhstan

14

677 817 855 881 978 2015 2016 2017 Q1 2017 H1 2017 Q3 6 124 7 934 8 161 8 753 8 431 2015 2016 2017 Q1 2017 H1 2017 Q3 7,6 7,7 7,5 2014 2015 2016 Net loans Net profit (YTD)

Fast growth both in volumes and in profitability on the backdrop of macroeconomic stabilization Company improving it market shares considerably

682 771 783 831 903 2015 2016 2017 Q1 2017 H1 2017 Q3 23 33 26 22 2015 2016 2016 Q3 2017 H3

Czech Republic

Key financial data (€m) Active clients (000’) Number of POS

Market opportunity (consumer lending) (€bn)(1)

#1 in POS

% of GDP 4.8% 4.7% 4.6% 1 Czech National Bank

15

751 819 830 833 844 2015 2016 2017 Q1 2017 H1 2017 Q3 6 029 4 951 3 604 3 492 3 320 2015 2016 2017 Q1 2017 H1 2017 Q3 7,2 7,8 8,2 2014 2015 2016 Net loans Net profit (YTD)

Profitability improvements both in Home Credit and Air Bank businesses

India

Key financial data (€m) Active clients (000’) Number of POS

Market opportunity (consumer lending) (€bn)(1)

#2 in POS

% of GDP 7.1% 6.2% 5.8% 1 Euromonitor

16

71 195 241 282 364 2015 2016 2017 Q1 2017 H1 2017 Q3 (26) (61) (39) (54) 2015 2016 2016 Q3 2017 Q3 490 1 351 1 804 2 111 2 579 2015 2016 2017 Q1 2017 H1 2017 Q3 3 289 5 789 8 298 10 739 18 940 2015 2016 2017 Q1 2017 H1 2017 Q3 109 125 145 2014 2015 2016 Net loans Net profit (YTD)

Almost doubling its distribution network in the last six months On-going effort to optimize distribution mode for POS loans while growing volumes

Market opportunity (consumer lending) (€bn)(1)

Number of POS

Indonesia

Key financial data (€m) Active clients (000’)

#1 in POS

% of GDP 10.3% 10.5% 10.7% 1 Euromonitor

17

25 87 112 145 173 2015 2016 2017 Q1 2017 H1 2017 Q3 (15) (19) (15) (15) 2015 2016 2016 Q3 2017 Q3 169 508 637 831 996 2015 2016 2017 Q1 2017 H1 2017 Q3 1 710 4 423 5 478 7 193 9 229 2015 2016 2017 Q1 2017 H1 2017 Q3 79 86 91 2014 2015 2016 Net loans* Net profit (YTD)

Achieving no.1 position in a competitive market

*Included portfolio which is not on HC books and is financed within JFS

The Philippines

Key financial data (€m) Active clients (000’) Number of POS

Market opportunity (consumer lending) (€bn)(1)

#1 in POS

% of GDP 7.7% 7.4% 7.0% 1 Euromonitor

18

14 68 82 108 142 2015 2016 2017 Q1 2017 H1 2017 Q3 (14) (16) (12) (5) 2015 2016 2016 Q3 2017 Q3 119 520 642 778 1 016 2015 2016 2017 Q1 2017 H1 2017 Q3 840 1 951 2 302 2 844 3 511 2015 2016 2017 Q1 2017 H1 2017 Q3 16 19 21 2014 2015 2016 Net loans Net profit (YTD)

Continuous geographical expansion accompanied by high growth of business Company on a good trajectory to reach break-even

Meeting Agenda

1. STRATEGY AND BUSINESS 2. SUMMARY BY COUNTRY 3. KEY FINANCIAL INDICATORS

1 619 2 000 1 397 2 187 2015 2016 2016 Q3 2017 Q3

Strong loan growth (€bn bn) (1) Resilient revenue (€m) (2)

Strong financial performance

Recove

• vering

g prof

• fitab

abil ility

14.0% 15.6%

19

Recovering profitability (€m) Cost of risk

16.2% (3.3)% RoAE NIM

13,2% 7,6% 8,0% 7,7% 2015 2016 2016 Q3 2017 Q3 5,8 9,9 8,0 13,9 2015 2016 2016 Q3 2017 Q3

Growing the size of business while preserving operating margins Impairment charges slightly up vs end 2016 due to high proportion of new customers from Asian markets

14.1% 14.2% 19.5% 14.1%

• 42

210 131 232 2015 2016 2016 Q3 2017 Q3

1 Net loans 2 Operating income

Profit & Loss: Continuous improvement in profitability

20

(€m, ratios annualized where applicable) 2015 2016 2016 Q3 2017 Q3 Net interest income 1,207 1,532 1,068 1,690 Net fee income 304 418 299 454 Other operating income 108 50 30 43 Operating income 1,619 2,000 1,397 2,187 Operating expenses (887) (1,115) (789) (1,157) Impairment losses (725) (563) (407) (688) Profit before tax 9 325 202 342 Income tax expense (50) (115) (71) (110) Profit from continuing operations (42) 210 131 232 Attributable to equity holders (40) 213 133 234 Key performance indicators NIM 15.6% 14.0% 14.1% 14.2% CIR 54.8% 55.7% 56.5% 52.9% CoR 13.2% 7.6% 8.0% 7.7% ROAE (3.3%) 16.2% 14.1% 19.5%

Balance sheet: Strong capital and asset quality

21

(€m) Assets 2015 2016 2016 Q3 2017 Q3 Cash and cash equivalents 1,343 2,412 2,041 2,815 Financial assets 1,501 1,252 1,301 1,234 Due from banks 391 397 337 625 Net loans 5,835 9,866 8,028 13,888 Other assets 586 777 688 928 Total assets 9,656 14,704 12,396 19,490 Liabilities Customer deposits 4,909 5,401 5,002 6,341 Due to banks 2,331 6,427 4,820 9,376 Debt securities 373 320 250 939 Subordinated liabilities 428 416 405 400 Other liabilities 419 639 582 698 Total liabilities 8,460 13,202 11,059 17,754 Total equity 1,196 1,501 1,337 1,736 NPL ratio 10.0% 6.1% 7.1% 6.2% NPL coverage ratio 116% 128% 123.5% 120.4%

Appendix

A team of recognized leaders in their fields, committed to high standards of corporate governance

Home Credit’s management team

Jiri Smejc CEO Tomas Kocka Deputy CEO Jean-Pascal Duvieusart Funding & Capital Markets Mel Carvill CGIRO Pavel Vyhnalek Regional Executive Director Pavel Rozehnal CLO Radek Pluhar CRO Khalid Husseini CIO Christoph Glaser CFO Tomas Jirgl Regional Executive Director David Minol Regional Executive Director Miroslav Boublik Head of Special Projects Petr Janák CHRO Ludek Mraz Head of CRM

Key financial results * Ownership Key y investments

Strong and diversified parent company

• Total assets: €34.8bn
• Equity: €6.9bn
• Net profit: €1.2bn

Petr Kellner 98.92% Ladislav Bartoníček 0.54% Jean-Pascal Duvieusart 0.54%

Diverse business activities encompassing banking and financial services, telecommunications, biotechnology, insurance, real estate, and agriculture Strong cash flow generation capacity to support further investment in high growth businesses

Listed

Value



€2.6bn (market value of PPF’s 81.06% share)



€0.7bn (book value)



€1.9bn (book value)



€0.7bn (book value)



€0.54bn (market value of PPF’s 12.92% share)



Bio technology investment

* Total assets and Equity as of 30 June 2017, Net profit for 12 months period ended 30 June 2017