OPEN FINANCE GROUP RESULTS AFTER FIRST QUARTER OF 2013 · 2017. 1. 20. · FIRST QUARTER OF 2013...

OPEN FINANCE

GROUP RESULTS AFTER

FIRST QUARTER OF 2013

Presentation of financial results for investors and analysts

Warsaw, May 9, 2013

BASIC FINANCIAL INFORMATION -

OPEN FINANCE GROUP

Page 1

CHANGE DATA AT THE END OF FIRST QUARTER OF 2013

- 2 % * Branches (218)

+ 3,4% * Equity (374,3 mln zł)

- 60 % ** Net profit (12,1 mln zł)

- 21,3 % ** Revenue (104,7 mln zł)

- 42,6 % ** EBITDA (23,8 mln zł) ***

- 33,7 p.p. ** ROE (13,4%) ****

* compared to data as at 31 December 2012

** compared to data for the period of Q1 2012

*** EBITDA - earnings before interest, tax, depreciation and amortisation

**** ROE - return on equity calculated as relation of annualised net profit for the period to equity as at the beginning of the period

OUR MISSION

• We are building the Financial Group – an unquestioned leader in its category in Central and

Eastern Europe

• Households are our only target Clients

• We aim to deliver dedicated and tailored product offer:

a) intermediation in respect of mortgages (financing of real estate) – Open Finance and Home

Broker

b) advisory and intermediation in respect of investment products – Open Finance and Home

Broker:

I. regular, long-term savings;

II. deposits and structured products with capital guarantee

c) life insurance products – Open Life

d) advisory and intermediation in respect of sale of real estate – Home Broker

e) portfolio asset-management „for everyone" – Open Finance and Home Broker

f) own, dedicated investment funds – Open Finance TFI

• Our ambition is to deliver our services to as many households as possible

• We target to deliver Investors both dividend and growth investment profile.

Page 2

MISSION STATEMENT

THE GROUP’S COMPETITIVE ADVANTAGE

• The diversity of companies within the Group is our great competitive advantage.

• Wide range of services offered.

• New solutions launched in our range: sale of cash loans and distribution of bank accounts –

particularly the second group of products allows us to initiate a long-term relation with the client.

• Introduction of innovative pro-client changes. Our priority is to build and maintain long-term relations

with our customers. To achieve this goal, our companies are undergoing changes that will ensure

compliance of our services and products with new guidelines and recommendations issued by the

relevant supervision authorities.

• A new CRM system is now under testing. It is an excellent tool that will help our advisers in their work

and allow us to provide our customers with precise offers and information according to the highest

standards. The new system will significantly improve the efficiency of our customer service processes.

Page 3

WHAT WE OFFER

KEY CHANGES WITHIN THE GROUP

• launching key data sheets for customers;

• implementing an adviser certification system and other processes designed to verify our advisers’ knowledge;

• taking disciplinary action against any financial adviser who fails to comply with the principle of providing

customers with detailed and reliable information and complete documentation regarding the products offered to

customers;

• creating a new group of employees: regional trainers responsible for, among other things,

• controlling our advisers’ work quality, and

• implementing changes to our induction training provided to all new employees, with special emphasis on

ethics, good market practices and high customer service standards.

• strengthening the role of internal audit function,

• reducing the age limit for access to selected products;

• withdrawing selected products carrying an excessively high risk of targeting customers with inadequate products

and/or services;

• significantly reducing the longest periods for Open Life products;

• significantly reducing the cancellation fees for selected Open Life products;

• increasing the transparency of the documents provided to customers (key data sheets, highlighted speech

balloons containing the most important information, examples of product performance scenarios depending on

market conditions);

• revising our investment insurance plan distribution model to reflect the expectations of the Polish Financial

Supervision Authority communicated to the market; in particular, launching the distribution of such products

through agents .

Page 4

CHANGES

57%

The net profit earned by the Group in 1Q 2013 was 12.134 thousand PLN.

CONSOLIDATED NET PROFIT – OPEN FINANCE GROUP

- 60%

14 988 17 944

28 489

16 140

20 251 22 196 23 150 24 516

30 338

25 524

20 150

47 203

12 134

-

10 000

20 000

30 000

40 000

50 000

Q12010

Q22010

Q32010

Q42010

Q12011

Q22011

Q32011

Q42011

Q12012

Q22012

Q32012

Q42012

Q12013

PLN'000

30 338

12 134

-

10 000

20 000

30 000

1Q 2012 1Q 2013PLN'000

57%

• Consolidation adjustments in 1Q 2013 concern, among others, the dividend received by Open Finance from Home Broker

Nieruchomości S.A. in amount of PLN 9.000 thousand.

• Results of Open Life TUŻ S.A. (OL) are accounted for in the consolidated net result of Open Finance Group using the equity

method; Open Life is not subject to full consolidation, thus Group’s revenue does not include that of Open Life TUŻ S.A. The

above net profit assigned to Open Life TUŻ S.A. of PLN 1.461 thousand represents 49% of net result of that company earned in

2013.

CONTRIBUTION OF EACH COMPANY TO CONSOLIDATED

RESULTS OF OPEN FINANCE GROUP

72 235

-

104 67530 932 2 498 - 990

0

50 000

100 000

OF HBN Group OF TFI cons adjustments Consolidatedrevenue

PLN

'00

0

COMPANIES' CONTRIBUTION TO THE CONSOLIDATED REVENUE IN Q1 2013

17 306

- - -

12 134

2 755

1 461599 - 9 987

0

5 000

10 000

15 000

20 000

25 000

OF HBN Group OL OF TFI cons adjustments Consolidated profit

PLN

'00

0

COMPANIES' CONTRIBUTION TO THE CONSOLIDATED NET PROFIT IN Q1 2013

100%

13%

43%

100%

Increase in revenue in the investment products segment

REVENUE STRUCTURE – OPEN FINANCE GROUP

- 21%

133 044

104 675 10%

44 934

104 675

19 534

10 765

10 3044 676

14 462

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

80 000

90 000

100 000

110 000

Mortgages and

mortgage relatedproducts

Regular premium

unit-linkedpolicies

Structured

products

Bank accounts Deposits Real estate

intermediation

Total

intermediationrevenue

PLN

'00

0

BREAKDOWN OF INTERMEDIATION REVENUE IN Q1 2012

56 74244 934

56 805

45 279

17 649

14 462

1 848

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

1Q 2012 1Q 2013PLN'000

INTERMEDIATION REVENUEOther revenue

Segment: Real estate intermediation

Segment: Investment products

Segment: Mortgages and mortgage related products

43%

18,5%

10%

4,5%

100% 14%

10%

CHAIN OF SALES IN OPEN FINANCE GROUP

Number of advisors 31 Dec 2012 (*) 31 March 2013 (*)

OF financial advisors 1 239 1 304

HB financial advisors 390 369

HB real estate agents 633 612

Total 2 262 2 285

(*) employment as at exact date

Number of branches 31 Dec 2012 31 March 2013

Open Finance 149 151

Home Broker 73 67

Total 222 218

• Defense of mortgage volumes from 4Q 2013;

• Gradual increase in the sale of loans in the following months of 1Q 2013.

MORTGAGES SALES VOLUMES -

OPEN FINANCE GROUP

384 456378 322

416258

1 572 1 5381 745

1 549

1 812 1 808 1 749

1 5481 263

1 169 1 232

806970

0

500

1 000

1 500

2 000

2 500

Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013MLN PLN

QUARTERLY VOLUMES OF MORTGAGES SOLD

Mortgages OF

Mortgages HB

• Sale of 10 mln PLN of cash loans generates the same revenue as the sale of

25 mln PLN of mortgages.

A dynamic growth in sales of cash loans was noted in the second half of 2012.

CASH LOANS SALES VOLUMES - OPEN FINANCE GROUP

4,07,1

17,9

34,4

75,0

0

10

20

30

40

50

60

70

80

1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013

Quarterly volumes of cash loans sold in 2012 and 2013

39%

3%12%

23%

8%

3%

8%4%

Structure of sales of cash loans by banks in Q1 2013

Bank 1

Bank 2

Bank 3

Bank 4

Bank 5

Bank 6

Bank 7

Bank 8

• „Volumes of production” means „first year declared premiums” adjusted by historical closing ratio.

• Open Finance noted an increase in the number of regular premium unit-linked policies sold as

compared to 4Q 2012 by 6% with a simultaneous decline in the average annual premium by 10%.

• Average regular premium in Home Broker in 1Q 2013 rose by 9% as compared to the same period of

2012.

SALES OF REGULAR PREMIUM UNIT-LINKED POLICIES –

OPEN FINANCE GROUP

10 66413 114

20 983

13 847

16 944

20 873

28 328

32 903

39 821

28 679

23 780

13 766 13 188

3 208 3 5255 302

4 100 3 817 4 748 5 4667 251

10 335

7 506 7 073

4 126 4 381

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2010 2011 2012 2013

REGULAR PREMIUM UNIT - LINKED POLICIES - quarterly volumes of sales and number of units sold - Open FinanceVolumes

Number

495847 1 045

1 497

2 736 2 702

3 678

4 508

8 852

5 148 5 309

3 983

2 958

130 243 282 380725 579

8821 291

2 278

1 390 1 529

738 702

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2010 2011 2012 2013

REGULAR PREMIUM UNIT - LINKED POLICIES - quarterly volumes of sales and number of units sold - Home Broker Volumes

Number

Since Q4 2012 there has been a significant increase in sales of Getin Noble Bank S.A. bank

accounts.

SALES VOLUMES OF OTHER INVESTMENT PRODUCTS –

OPEN FINANCE GROUP

3 201 4 3021 675

2902 044

9 279

17 275

0

5 000

10 000

15 000

20 000

25 000

1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013

NUMBER OF BANK ACCOUNTS SOLD

OF

HB

12 480

21 577

• Collected deposits constitute an excellent base for cross-sell of regular premium unit-linked policies

and structured products.

• The sales of PLN 167 mln regarding single-premium investment products comprise both high-

margin structured investments, low-margin investment policies, as well as bonds.

SALES VOLUMES OF OTHER INVESTMENT PRODUCTS –

OPEN FINANCE GROUP

6880 90

59

116

166

113

79

127

86

142

313

167

0

50

100

150

200

250

300

350

Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013

MLN PLN

VOLUMES OF STRUCTURED PRODUCTS SOLD

1 8481 971

1 200

1 5301 441

1 521

2 435

1 911

1 5711 449

1 3541 435

1 727

0

500

1 000

1 500

2 000

2 500

Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013

MLN PLN

VOLUMES OF DEPOSITS SOLD

• In 1Q 2013 revenues of Home Broker Group amounted to PLN 30.932 thousand and

the net profit was PLN 2.755 thousand.

39%

61%

REVENUE AND NET PROFIT - HOME BROKER GROUP

- 73%

- 34%

46 985

30 932

-

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000

50 000

Q1 2012 Q1 2013PLN'000

HBN GROUP REVENUE

HBN revenue

10 112

2 755

-

2 000

4 000

6 000

8 000

10 000

12 000

1Q 2012 1Q 2013PLN'000

HBN GROUP NET PROFIT

SALES VOLUMES IN HOME BROKER GROUP

- FINANCIAL PRODUCTS

2 736 2 702

3 678

4 508

8 852

5 148 5 309

3 983

2 958

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2011 2012 2013

REGULAR PREMIUM UNIT-LINKED POLICIES - quarterly production -Home Broker

725579

882

1 291

2 278

1 3901 529

738 702

0

500

1 000

1 500

2 000

2 500

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2011 2012 2013

Number of regular premium unit-linked policies sold in each quarter

units

PLN'000


- FINANCIAL PRODUCTS

452

569607

573

457

378322

417

263

0

100

200

300

400

500

600

700

Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013MLN PLN

QUARTERLY SALES OF MORTGAGES (including cash loans) - HOME BROKER


- REAL ESTATE

150 182 204 187 209 208

339 320251

490

666712

654734

769

1 276 1 293

950

-100

100

300

500

700

900

1 100

1 300

Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013

Value of real estate and number of transactions on the primary market

Value of real estate -primary market (PLN mln)

Number of transactions -primary market (units)

420500

432 416 438 434 482346 309

1 506

1 754

1 571 1 526 1 583 1 618

1 775

1 5161 429

0

400

800

1 200

1 600

2 000

2 400

Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013

Value of real estate and number of transactions on the secondary market

Value of real estate -secondary market (PLNmln)

Number of transactions- secondary market(units)

OPEN FINANCE TFI

Open Finance TFI SA obtained the FSA approval for management of funds on 9 October 2012 and

began operations.

1. Investment Funds under management:

Open Finance Open-End Investment Fund with 6 subfunds;

4 Closed Investment Funds with absolute return strategy;

1 Closed Investment Fund – corporate bonds;

1 securitization fund;

1 private equity investment fund.

2. Assets under management:

Exceeding PLN 800 mln level after 6 months of operations;

Planned assets level at the end of 1H 2013: more than PLN 1 bln;

3. Partners:

Open Finance S.A., Home Broker Nieruchomości S.A., Getin Noble Bank S.A. (main

distributors);

OF Open-End Investment Fund available under insurance capital funds of leading

insurance companies (AXA, ING, Aegon, Open Life)

4. Positive financial results for 1Q 2013. Plan to achieve positive financial results for 2013.

INTRODUCING PRO-CLIENT CHANGES

• Withdrawal of complicated, long-term insurance policies from sale,

• Reduction of fees for early cancellation of insurance,

• Further restrictions on the age of entry to individual products,

• Simplification and increase in the transparency of the documentation for the customer,

• Introduction of the Product Card, which is a clear guide to the product.

Page 22

LEADER IN MARKET CHANGES

OPEN LIFE IN THE STRUCTURE OF

OPEN FINANCE GROUP

OPEN FINANCE

GROUP RESULTS AFTER

1Q 2013

CONSOLIDATED ASSETS, PROFIT AND LOSS OF

OPEN FINANCE GROUP

value %

ASSETS

Fixed assets 425 971 414 271 11 700 3%

Tangible and intangible fixed assets 331 557 324 419 7 138 2,2%

Investment in associate - Open Life 56 715 55 254 1 461 3%

Investment property 6 567 4 145 2 422 58%

Deferred tax asset 26 788 26 157 631 2%

Other long term receivables 3 667 3 619 48 1%

Other non-financial long term assets 677 677 - 0%

Current assets 167 043 186 714 (19 671) -11%

Trade receivables 50 365 98 211 (47 846) -49%

Interperiod settlements 92 516 67 273 25 243 38%

Cash and cash equivalents 16 703 14 128 2 575 18%

Other 7 459 7 102 357 5%

TOTAL ASSETS 593 014 600 985 (7 971) -1,3%

LIABILITIES AND EQUITY

Equity 374 259 362 125 12 134 3%

Share capital 542 542 - 0%

Other reserve capital 228 833 228 833 - 0%

Retained earnings 144 884 132 750 12 134 9%

Liabilities 218 755 238 860 (20 105) -8%

Deferred tax provision 19 606 16 996 2 610 15%

Provisions 2 206 4 691 (2 485) -53%

Financial lease liabilities 2 172 2 300 (128) -6%

Issued bonds 119 819 78 742 41 077 52%

Financial liabilities at fair value through profit or loss 3 833 53 328 (49 495) -93%

Trade liabilities 12 133 17 173 (5 040) -29%

Interperiod settlements 39 218 39 893 (675) -2%

Corporate income tax payable 4 661 5 660 (999) -18%

Other non-financial liabilities 15 107 20 077 (4 970) -25%

TOTAL LIABILITIES AND EQUITY 593 014 600 985 (7 971) -1,3%

PLN'000

Change

31.03.2013 31.12.2012

value %

Revenue 104 675 133 044 (28 369) -21%

Costs of commissions paid (29 279) (39 984) 10 705 -27%

Gross result 75 396 93 060 (17 664) -19%

Administrative costs (53 697) (54 858) 1 161 -2%

Result on other operating activity 678 983 (305) -31%

Share in associate's profit - Open Life 1 461 2 310 (849) n/a

EBITDA 23 838 41 495 (17 657) -43%

Depreciation and amortisation (7 381) (3 531) (3 850) 109%

Result on financial activity (1 627) (803) (824) 103%

Gross profit 14 830 37 161 (22 331) -60%

Income tax 2 696 6 823 (4 127) -60%

Net profit 12 134 30 338 (18 204) -60%

PLN'000

Change1.01.2013-

31.03.2013

1.01.2012-

31.03.2012

This presentation has been prepared for information purposes only to be used by Open Finance S.A.’s customers and

shareholders and by market analysts, and may not be considered as an offer or recommendation to execute any

transactions. The information contained in this presentation is based on publicly available, reliable sources. However, Open

Finance S.A. cannot guarantee that this information is complete. Open Finance S.A. takes no responsibility for the

consequences of any decisions based on any information contained in this presentation. The information contained in this

presentation has never been subject to independent verification and may at any time be subject to change or modification.

The publication by Open Finance S.A. of the figures contained in this presentation is not a breach of the regulations

applicable to companies whose shares are traded on a regulated market. The information provided in this presentation has

already been disclosed in current or periodic reports submitted by Open Finance S.A. or constitutes an addition to those

reports, and its publication does not require the Company to fulfill the obligation to provide information as imposed on the

Company as a public company. The content of this presentation may not, in any case, be interpreted as an express or

implied statement of assurance made by the company or its representatives. In addition, neither the company nor its

representatives may be held liable, in any way (as a result of negligence or for any other reason) for any loss or damage

that might arise in connection with use of this presentation or any content of this presentation or that might arise in any

other way in connection with the information contained in this presentation. In the event of a change to the company’s

strategy or intentions or in the event of unexpected facts or circumstances affecting the company’s strategy or intentions,

the company is not responsible for informing the public of any possible modifications or changes to any information, data or

statements provided in this presentation. Please note that the only reliable source of information on the situation of Open

Finance S.A., events, financial results and indicators is the current and periodic reports submitted by Open Finance S.A. as

part of its obligation to provide information.

DISCLAIMER

Thank you for attention

OPEN FINANCE GROUP RESULTS AFTER FIRST QUARTER OF 2013 · 2017. 1. 20. · FIRST QUARTER OF 2013...

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