COL Financial Group, Inc. · PSE:COL
COL Financial — 2Q 2019 Earnings Presentation
30 slides from COL Financial's earnings presentation, August 2019
Slide 1: COL Financial Investor Presentation
COL FINANCIAL . | 201 INVESTOR . PRESENTATION K ah WW some
Slide 2: Key Highlights: Company Overview
Company Financial & Growth Overview Operating Plans Highlights Key Highlights 2
Slide 3: Company Overview
Company Overview Established and licensed by the SEC in 1999 The leading and fastest-growing online stockbroker in the Philippines Focused on tapping the underserved retail investor base in the stock market Founder (Edward K. Lee) retains a 21.2% stake and actively manages the Company 3
Slide 4: Ownership and Market Capitalization
EDWARD K. LEE 21.2% DAIWA SECURITIES GROUP ALEXANDER C. YU 24.9% OTHER DIRECTORS & OFFICER PUBLIC 14.9% Outstanding 476.0Mil Shares 24.8% 14.1% Free Float 122.8Mil Market Cap* Php8.9Bil *AS OF END JUNE 2019 4
Slide 5: Business Objective
Business Objective To be the preferred source of financial services, a trusted provider of guidance and investment and a strong organization committed to delivering great value to its customers. Our goal is to be Champion of the Filipino Investor 5
Slide 6: The Biggest Philippine Based Broker
The Biggest Philippine Based Broker 1H19 VALUE 1H19 RANK BROKER NAME % OF TOTAL TURNOVER (PHBIL) 1 UBS SECURITIES PHILIPPINES, INC. 166.9 8.9% 2 CLSA PHILIPPINES, INC. 145.6 7.8% 3 CREDIT SUISSE SECURITIES (PHIL), INC. 133.9 7.2% 4 DEUTSCHE REGIS PARTNERS INC. 112.8 6.0% 5 COL Financial Group, Inc.
Slide 7: Corporate Milestones
Corporate Milestones '* COL's IPO for PSE listing * Launched the COL PH Trading platform + PSE approved COLs application asa trading participant Became licensed by the SEC to conduct business as a broker and seller of securitiesin the Philippines * Official change of Coporate name to COL FINANCIAL G
Slide 8: Bulk of Revenues Generated from Commissions & Interest
REVENUE BREAKDOWN Bulk of Revenues Generated from 0.1% Others 1.3% Trailer Fees Commissions & Interest COL’s Philippine operations account for 99.2% 50.3% Interest of revenues. Commissions from both Philippines and HK account for 48.2% of revenues. 0.8% HK Com 9.4% PH Com-Agency & Advisory Interest
Slide 9: Key Highlights: Financial Highlights
Company Financial & Growth Overview Operating Plans Highlights Key Highlights 9
Slide 10: Key Highlights: Positives and Negatives
Key Highlights Positives Negatives 2Q19 profits up 16.9% 1H19 profits still down 2.5% Sustained growth in new accounts Market share in the PSE fell MF enjoyed net sales across all non- Total assets down money market funds despite industry wide net redemptions Margin business recovered
Slide 11: 1H19 Net Income -2.5% Y/Y
CONSOLIDATED INCOME STATEMENT (IN PHP MIL) CHANGE 1H18 1H19 AMOUNT % 1H19 Net Income -2.5% Y/Y Income Commissions 404.7 294.5 (110.1) -27.2% Interest 190.7 307.5 116.7 61.2% 1H19 net income fell slightly by 2.5% to Php314.3 Mil. Trailer Fees 7.0 8.6 1.6 22.7% Consolidated revenues were flat at Php61
Slide 12: 2Q19 Net Income +16.9% Y/Y
CONSOLIDATED INCOME STATEMENT (IN PHP MIL) CHANGE 2Q18 2Q19 AMOUNT % 2Q19 Net Income +16.9 Y/Y Income Commissions 144.0 123.0 (21.0) -14.6% 2Q19 net income was up 16.9% to Php133.9 Mil, driven by Interest 95.6 147.9 52.3 54.7% higher interest income and trailer fees. Trailer Fees 3.5 4.4 0.8 23.3% O
Slide 13: Flattish Expenses
Flattish Expenses BREAKDOWN OF EXPENSES (IN PHPMIL) CHANGE 1H18 1H19 Expenses were flattish at Php197.1 Mil as lower trading AMOUNT % related expenses largely offset the increase in fixed Trading Related Expenses operating costs. Commission expenses 33.4 27.0 -6.3 -18.9% Stock exch. dues & fees 15.6
Slide 14: Lower Market Volumes Offset by Higher Yields on Deposits
REVENUE BREAKDOWN (IN PHPMIL) Lower Market Volumes Offset 1H18 1H19 CHANGE by Higher Yields on Deposits AMOUNT % Philippines Commission 394.3 289.4 (105.0) -26.6% Revenues from Philippine operations were flat as higher Self-directed 326.8 231.9 (94.9) -29.0% Agency & advisory 67.6 57.5 (10.1) -14.9%
Slide 15: Lower Market Volumes Offset by Higher Yields on Deposits
REVENUE BREAKDOWN (IN PHPMIL) Lower Market Volumes Offset 1H18 1H19 CHANGE by Higher Yields on Deposits AMOUNT % Philippines Commission 394.3 289.4 (105.0) -26.6% Trailer fees increased by 22.7% due to the increase in the Self-directed 326.8 231.9 (94.9) -29.0% Agency & advisory 67.6 57.5 (10.1) -14
Slide 16: Market Share Normalized
Market Share Normalized COMPARATIVE PERFORMANCE (COL VS. PSE) CHANGE 1H18 1H19 AMOUNT % COL’s average daily turnover fell 27.8% Y/Y to Php894.4 Mil in 1H19. In contrast, the PSE’s average daily turnover PSE Ave. Daily T/O (PhpMil) 7,628.9 7,710.2 81.3 1.1% was up slightly by 1.1%. COL Ave. Daily T/O
Slide 17: ROAE Stays Healthy at 38.2%
ROAE Stays Healthy at 38.2% SELECTED FINANCIAL INDICATORS CHANGE 1H18 1H19 AMOUNT % 1H19 operating profits were flat at Php414.4 Mil. Operating Profits Operating profits from the Philippines were flat at Philippines 422.2 426.1 3.9 0.9% Php426.1 Mil. Hong Kong (5.5) (11.7) (6.2) 112.9% Total 416.7 4
Slide 18: Liquid Balance Sheet
Liquid Balance Sheet CONSOLIDATED BALANCE SHEET (IN PHPMIL) CHANGE 12/31/18 6/30/19 AMOUNT % Cash & cash equivalents fell by 9.8% to Php8.7 Bil largely due to the payment of cash dividends, higher receivables, Cash & equivalents 9,657.4 8,707.8 (949.5) -9.8% lower trade payables, and capital infusio
Slide 19: Liquid Balance Sheet
Liquid Balance Sheet CONSOLIDATED BALANCE SHEET (IN PHPMIL) CHANGE 12/31/18 6/30/19 AMOUNT % The reduction in cash was largely responsible for the 6.9% decline in total assets to Php10.4 Bil. Nevertheless, the Cash & equivalents 9,657.4 8,707.8 (949.5) -9.8% balance sheet remained highly liquid, wit
Slide 20: Sustained Customer Growth
CLIENT BASE +14.5% Sustained Customer Growth 312,544 350,000 292,401 272,883 247,609 300,000 COL’s client base grew by 14.5% Y/Y to 312,544 as of end June 2019. 205,039 250,000 162,330 Average monthly additions during the past 12 200,000 months remained strong at 3,305. 112,827 150,000 82,476 100,00
Slide 21: Client Equity Up
CLIENT EQUITY (PHP MIL) +11.9% 90,000 78,694 Client Equity Up 73,102 72,398 Retail 70,350 80,000 Insitutional 70,000 59,290 60,000 46,894 Client equity was up 11.9% Y/Y to Php78.6 Bil as of 43,290 end June 2019, largely due to the 11.2% increase in 50,000 the PSEi. 32,051 40,000 Net new flows from r
Slide 22: Margin Loans Up
AVE DAILY MARGIN LOANS (PHP MIL) +9.7% Margin Loans Up 1,400 1,231 1,220 Average daily margin loans increased by 9.7% to 1,200 Php616 Mil Y/Y. 971 1,000 As of end June, the total number of approved 822 margin accounts was 1,141, down slightly from 1,159 800 during the same period last year. 616 596
Slide 23: Key Highlights: Growth and Operating Plans
Company Financial & Growth Overview Operating Plans Highlights Key Highlights 23
Slide 24: Pro Active Growth Plans
Pro Active Growth Plans Maintain leadership by focusing on our consistent, long-term strategic goals PRIORITIES STATEMENT STRATEGIES • Expand and develop efficient touch points to educate and guide prospective and existing clients EXPAND CLIENT ACQUISITION #1. To be the leading asset gatherer in the
Slide 25: Fund Source's Performance Since Launch
Fund Source’s Performance Since Launch NET SALES VS AUA (IN PHPMIL, ACC TO TYPE OF FUND) TYPE OF FUND TOTAL SALES** % TOTAL TOTAL AUA* % TOTAL Money Market 187.6 6.4% 200.9 6.5% Bond Fund 166.2 5.7% 173.3 5.6% Balanced Fund 166.7 5.7% 171.0 5.5% Equity Fund 2,417.5 82.8% 2,564.5 82.5% Total 2,921.5
Slide 26: Positive Net Sales Despite Challenging Environment
Positive Net Sales Despite Challenging Environment 1H19 NET SALES (IN PHPMIL, ACC TO TYPE OF FUND) TYPE OF FUND INDUSTRY* COL Money Market 291.8 38.4 Bond Fund -10,080.8 13.4 Balanced Fund -2,095.2 3.7 Equity Fund -187.0 5.9 Total -12,071.1 61.4 *FUNDS AVAILABLE IN COL FUND SOURCE ONLY 26
Slide 27: Average AUA Up
AVERAGE AUA (NON-MONEY MARKET FUNDS ONLY, IN PHP MIL) 3,500.0 2,879.3 2,769.0 2,606.3 3,000.0 2,435.6 2,332.4 2,238.8 2,500.0 2,028.5 Average AUA Up 1,766.5 2,000.0 1,529.1 1,328.4 1,174.0 1,500.0 1,003.8 Trailer fee up due to significant growth in average AUA on a year-on-year basis. 753.6 1,000.0
Slide 28: Growing Number & Percentage of Clients Own MFs
Growing Number & Percentage of Clients Own MFs MF Investors % of Total Clients 12.8% 12.5% 12.4% 12.3% 45,000.0 14.0% 12.0% 11.6% 11.1% 40,000.0 10.4% 12.0% 9.9% 9.5% 35,000.0 8.9% 10.0% 8.5% 30,000.0 7.5% 6.9% 25,000.0 8.0% 39,880 38,069 20,000.0 36,349 4.6% 6.0% 34,847 32,675 30,421 3.4% 27,375 15
Slide 29: ft wvicher life
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Slide 30: Disclaimer
Disclaimer This presentation was prepared solely and exclusively for discussion purposes. This presentation and/or any part thereof may not be reproduced, disclosed or used without the prior written consent of COL Financial (the “Company”). This presentation, as well as discussions arising therefrom