2. 1
Disclaimer
These presentation materials have been prepared by Hyundai Capital Services., Inc. (“HCS” or “the Company”), solely for the use at this
presentation. This presentation material may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or
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The Company has not taken measures to independently verify data contained in this material. 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. This presentation should not be construed as legal, tax, investment or other advice.
Financial statements in this document have been prepared in accordance with K-IFRS. Other additional market information has been sourced
from the Company or from other external institutions. 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.
Certain information and statements made in this presentation contain “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.
3. 2
Asset growth through Enhanced Business as a Captive Finance despite unfavorable market
conditions
Laid foundations for better profitability through Asset Quality improvement and Bad Debt
Expense decrease, as a result of constant risk management.
Overseas operation expansion through strengthened Global Business capabilities
Major Issues
4. 3
Stagnant captive auto sales
• Imported auto sales still growing, but at a slower rate
• Captive sales improving as bestseller models released in
September (HMC Avante, KMC Sportage etc.)
Macroeconomic uncertainty remains
• Domestic consumption recovering, but economic
growth still uncertain
Low interest continued
• Profitability of finance companies restricted
668 641 685
499
482 458 465
378
392 441
510
426
1,542 1,540
1,660
1,303
2012 2013 2014 9M15
HMC KMC Others
74.6% 71.4% 69.3% 67.3%HMG
M/S
Business Environment
Domestic Economy Domestic Auto Sales
(unit : *1,000)
2.3%
2.9%
3.3%
2.6%
2.75%
2.50%
2.00%
1.50%
2012 2013 2014 9M15
GDP growth rate Key rate
Source: Bank of Korea, Korea Automobile Manufacturers Association,
Korea Automobile Importers & Distributors Association
5. 4
2012 2013 2014 9M15 YTD
New car 11,000 10,510 10,472 10,993 5.0%
Auto lease 3,805 3,976 3,818 3,948 3.4%
Used car 1,410 1,484 1,464 1,423 -2.8%
P-loan 1,959 2,111 2,162 2,066 -4.4%
Mortgage 1,641 1,796 1,745 1,696 -2.8%
Auto-finance
• Reinforce competitiveness through OEM co-marketing
• Launch specialized products to meet customer needs
• Exploit new markets for profit sources diversification
(Personal lease, Commercial vehicle lease)
Personal-finance
• Strengthened marketing to target prime customers
Jan Interest lowered by 1% on all KMC vehicles
Mar Interest lowered by 1% on all HMC vehicles
HMC Avante “KRW 100K Miracle” promotion
May HMC Sonata interest-free installment
Nov KMC K3, K5 “Free 2015” promotion
16,214 15,970 15,754 16,364
4,071 4,427 4,569 4,672
20,285 20,397 20,323 21,036
79.9% 78.3% 77.5% 77.8%
2012 2013 2014 9M15
Auto asset Non-auto asset % of Auto asset
Asset
Asset Portfolio Business Strategies 2015
(unit: KRW bn)
(unit: KRW bn)
Reference : OEM co-marketing
6. 5
2013 2014 9M14 9M15 YoY
Operating Rev①
2,915.1 2,745.9 2,091.7 1,963.9 -6.1%
Operating Exp①
2,486.8 2,423.8 1,826.5 1,665.5 -8.8%
Interest expense 800.6 752.6 573.0 491.2 -14.3%
Lease expense 505.9 500.5 372.4 380.1 2.1%
SG & A 671.7 702.3 518.7 539.6 4.0%
Bad debt expense 453.1 418.3 324.6 218.3 -32.8%
Operating Income 429.1 321.9 265.0 300.0 13.2%
Non-operating
Income
95.1 9.1 3.8 32.4 751.4%
Equity method
income
7.0 17.0 10.3 28.8 179.6%
Net Income 391.4 237.7 192.7 244.9 27.1%
ROA 1.9% 1.3% 1.3%②
1.6% 0.3%p
Operating Revenue
• Product interest lowered due to key rate drop
Operating Expenses
• Bad debt expense decreased due to asset quality
improvement
• Interest expense decreased due to key rate drop
Net Income
• Equity method income increased due to stabilized
overseas operation
6.8% 6.6%
6.0%
4.9%
2012 2013 2014 9M15
New Car Financing APR
Profitability
Summary of Income Statement Analysis on Income Statement
(unit: KRW bn)
① Excluding FX effects
② Including one-off disposal loss
7. 6
2.5%
2.7%
2.4%
2.1%
1.0% 1.1% 1.0% 0.9%
2012 2013 2014 9M15
30+ DQ rate New Car Financing 30+ DQ rate
385 437 440 443
280
326 334 283
665
763 774 726
144.9%
154.4%
162.2% 161.9%
2012 2013 2014 9M15
Reserves Allowance 30+ DQ coverage
Delinquency rate stabilizing
• Reinforced underwriting led to continuance of asset quality
improvement
Conservative reserves policy
• Max of expected loss, incurred loss or FSS requirement
• As new car financing was the main driver for asset growth, the
total reserve amount is maintained
Asset Quality
Delinquency Reserve
(unit: KRW bn)
① (Reserve + Allowance)/30days+ delinquent assets
①
8. 7
2012 2013 2014 9M15 YTD
Total Asset 21,885 22,369 22,508 23,327 3.6%
Total Capital① 3,031 3,400 3,395 3,671 7.0%
2012 2013 2014 9M15 YTD
Adjusted
Total Asset
20,438 20,673 21,793 22,628 3.8%
Adjusted
Total Capital
2,954 3,130 3,346 3,654 9.2%
7.2X
6.6X 6.6X 6.5X
2012 2013 2014 9M15
14.5% 15.1% 15.4% 16.1%
2012 2013 2014 9M15
Capital Structure
Capital Adequacy RatioLeverage
Source : Separate Financial Statement
① Based on previous quarter’s total capital since 2013
(unit: KRW bn)(Unit: KRW bn)
9. 8
2014 9M15
Total Funding 5,893 5,490
Bond 3,353 2,870
Domestic 2,510 2,071
Overseas 843 799
ABS 600 880
CP, Bank loan 1,940 1,740
Domestic
Bond
54.1%
Overseas
Bond
22.5%
Domestic
ABS
8.5%
Overseas
ABS
5.9%
Loan
6.6%
CP
2.5%
2014 9M15
2.0yr 2.0yr
1.9yr
2.0yr
148.0%
142.0%
132.0%
135.6%
2012 2013 2014 9M15
Debt maturity ALM ratio
Domestic
Bond
52.0%Overseas
Bond
26.2%
Domestic
ABS
7.6%
Overseas
ABS
5.3%
Loan
7.8%
CP
1.1%
KRW
17.8 tn
KRW
18.3 tn
New funding
Portfolio by product
Funding
Funding Position Asset-Liability Maturity
(unit: KRW bn)
Funding Guidelines
• Long-term debt : 60% or more
• By Product: ABS <20%, CP <10%
• ALM ratio : 100% or more
Source: Internal Sources
10. 9
1,100 1,304 1,375 1,411
2,480 2,345 2,524 2,731
3,580 3,649 3,899 4,142
2012 2013 2014 9M15
Cash Credit line
5,176 4,953
5,790 5,727
69.2% 73.7%
67.3% 72.3%
2012 2013 2014 9M15
Short-term debt
Liquidity
Liquidity Position Short-term debt Coverage
(unit: KRW bn) (unit: KRW bn)
Contingency framework
• Early warning and response system in place
• Daily monitoring of key market indicators
Liquidity Management
• Satisfies Basel III Liquidity coverage ratio
• Diversified Credit lines by lender and tenor
Source: Internal Sources
11. 10
Role of HCS
• Take part in key decision makings through dispatching
managerial personnel and involving in major committees
• All-around support through Global Business Division
5
9
14
19
24
31
37
'09 '10 '11 '12 '13 '14 9M15
Country
(Corp. name)
Founded
Equity
structure
Financial Asset①
(Local currency)
(HCA)
1989.9
HMA 80%
KMA 20%
KRW 31.7trn
(USD 26.7bn)
(HCUK)
2012.2
HCS 30%
HMUK 10%
KMUK 10%
SCUK 50%
KRW 2.5trn
(GBP 1.4mn)
(BHAF)
2012.6
HCS 46%
HMC 14%
BAI 40%
KRW 2.9trn
(CNY 15.6bn)
(HCCA)
2014.4
HMC 60%
KMC 40%
KRW 336bn
(CAD 378mn)
※ Germany : Internet bank license applied
※ Brazil, Russia, India, Australia : Financial Advisory
Overseas Business
Overseas Operations Growth of Overseas Asset
(unit: KRW tn)
Source: Internal Sources
① FX rate as of 3Q15-end
12. [Appendix] Corporate Culture
CEO Plan the KIDS
In-company day care centers
• 4 centers – Yeouido, Hongdae, Daebang offices
Business consulting program for retirees
• 5 businesses launced – restaurant, CVS, Rent-a-car company
• Plans to expand consulting coverage to ventures, design, etc.
11
