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2023_EN. HYUNDAI CAPITAL SERVICES 2023 PERFORMANCE

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- HCS reported strong financial results for 4Q 2023, with record high operating income driven by robust car sales and an improved sales mix at HMG. - HCS maintained an auto-centric asset portfolio, with new car and lease assets growing due to stable production and sales. - While expenses increased due to higher interest rates, HCS mitigated profit impacts through competitive auto financing and pre-emptive risk management.

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EARNINGS RELEASE 4Q 2023
Disclaimer This presentation and its contents have been prepared by Hyundai Capital Services, Inc. (HCS or the Company) solely for information purposes, and may not be reproduced, published, redistributed, or transferred, directly or indirectly to any other person, in whole or in part, for any purpose. 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 herein. This presentation shall 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 contents such as market or industry information have been sourced internally or from various associations. The data contained in this presentation is current as of the date hereof, but the Company shall not be liable for any updates or verification of the contents thereafter. Certain information and statements in this presentation contain estimates and other forward-looking statements which should be approached with caution. The Company shall not be responsible for any losses or damages incurred based on these forward- looking statements.
Hyundai Capital Services (HCS) Leading Captive Finance Company in the Market Credit Ratings Domestic Business Portfolio Auto captive Auto maker 82.1% Auto 鐃 17.9% Non-Auto Key Figures Financial Assets 34.5 TKRW IBT 432.7 Bn KRW Shareholders Global 2022 2023 2024 AA+ AA AA- A3 Baa1 Baa2 2022 2023 2024 1 Hyundai Motor Group (HMG) 99.9% ownership 59.7% 40.1% Hyundai Motor KIA Rating agencies: Domestic (NICE, Korea Ratings, Korea Investors Service), Global (Moodys)
9.9 15.1 7.2 11.6 87 100 142 163 76,814 75,809 81,760 Hyundai Motor Group (HMG) Record High Operating Income as a Result of Strong Car Sales and Improved Sales Mix HMG Sales Mix and Profitability Global sales boosted by strong performance in major markets despite internal and external uncertainties ASP (Average Selling Price) continued to rise with increased share of high ASP models such as Genesis and SUV HMG Global Car Sales 6,666 6,845 7,306 2021 2022 2023 27.0 28.3 2022 2023 56.8% 59.1% 31.9 33.9 2022 2023 65.0% 68.1% Profitability growth from stable car sales and high ASP vehicle mix Operating income Operating margin Revenues (T KRW) 8.4% 11.6% 6.9% 9.3% 2022 2023 2022 2023 (K units) Car Sales by Region Global HMG Global Car Sales Others India Europe North Americas Korea High ASP Models ASP (Mn KRW) 2 1,230 1,329 2022 2023 1,809 2,092 2022 2023 1,117 1,243 2022 2023 810 860 2022 2023 Korea North Americas Europe India HMC KIA HMC KIA 24% 12% 17% 29% 18% 7,306 2023 HMC, KIA Biz. Performance Report, Wholesale HMC North Americas, KIA US HMC Europe, KIA Western Europe HMC Genesis+SUV, KIA RV
Asset Auto-Centric Asset Portfolio Based on Strong HMG Sales Support Auto Non-Auto New cars: Asset growth from normalized production & robust sales Lease: Continued growth, with focus on high ASP models Used cars: Offering captive financing for HMGs CPO business P-Loan: Decreased in asset portion (2.8%) PF: Limited risk, with focus on senior tranche, metropolitan, residential exposure (4.4%) New Car Lease Used car 71.1% 73.5% 73.3% 76.8% M/S HMG Sales (K units) 1,341 1,262 1,230 1,329 X-sell % Prime % 65.7% 62.9% 62.3% 69.2% 86.5% 87.5% 91.3% 90.4% 75.9% 77.6% 78.3% 82.1% Portion 3 15.5 14.8 15.8 17.5 6.1 6.7 7.6 7.9 2.7 2.8 2.6 2.9 24.2T 24.3T 26.1T 28.3T 2020 2021 2022 2023 (T KRW) 2.2 2.3 1.9 1.0 3.5 3.6 3.4 3.2 0.4 0.8 1.6 1.5 0.4 0.3 0.3 0.5 6.5T 7.0T 7.2T 6.2T 2020 2021 2022 2023 P-Loan Mortgage Others PF 21.1% 22.4% 21.7% 17.9% Portion (T KRW) NICE CB Grades 1~4 1H21 Credit score 780 and above (21 credit score scheme in place)
P&L Competitive Auto Finance and Pre-emptive Risk Mgmt. Mitigated P&L Impact from Market Uncertainties Summary of Financial Statement (Bn KRW) Key Message Revenue increase from auto-centric asset growth (34.5T, YoY +3.8%) Lease income Operating Revenue Operating Expense Operating Income Interest expense Installment income IBT Bad debt expense Non-operating Income Equity Method income - Sharp increase in Installment Income from enhanced product competitiveness - Lease Income boosted from increased demand for high ASP vehicle leasing Operating Expense increased amid high interest rate trends and concerns for economic slowdown 1.48% 0.94% 1.04% 0.92% 2020 2021 2022 2023 30+ % - Interest expense increased due to sharp interest rate hikes - Bad Debt Expense reflecting industry-wide deterioration of asset quality Stable delinquency% from pre-emptive risk management , Excl. FX and derivatives impact Reflects 40.5Bn KRW equity method losses by impairment assessment of HCBE after Allane acquisition Reflecting reduction in corporate tax expense of 99.3Bn, due to change in the accounting treatment of deferred corporate tax following the dividend payout of HCUK, BHAF Net Income 4 SG&A 2021 1,109.4 2,941.2 2,469.8 486.1 557.7 588.8 575.2 139.5 89.1 71.5 432.6 620.2 2022 1,799.8 3,787.0 3,311.8 474.5 711.8 610.5 583.3 198.3 108.8 103.8 437.1 676.0 2023 2,185.5 4,478.7 4,108.1 364.3 1,087.4 827.7 432.7 279.4 68.4 59.7 459.9 704.2 +18.3% YoY +24.0% -23.2% +52.8% +35.6% -25.8% +21.4% +40.9% -37.2% -42.5% +5.2% +4.2%
7.6x 7.2x 7.4x 7.2x 2020 2021 2022 2023 Domestic Bonds 56% Overseas Bonds 17% ABS 17% Bank 10% CP 1% Key Index Solid Financial Position Maintained Within Regulatory Guidelines Provision Funding Regulatory reserves managed above government guideline(100%) Stable funding through portfolio diversification 120.7% 122.6% 129.4% 131.1% 2020 2021 2022 2023 Debt Balance 31.4T KRW 2023 Guideline 6M Coverage 125% 100% ALM 123% 100% Liquidity Stable liquidity mgmt. based on conservative internal guideline Capital Adequacy Leverage managed well below regulatory guideline (9x) USD JPY AUD CHF CNY EUR HKD SGD 5 No dividend payout 21~23 Leading the ESG bond market, through issuance of Green Bonds & SLB (Sustainability-linked Bonds) Asset Leverage (Asset/Equity) Regulatory Reserve Coverage Total liquidity / 6M coverage Average maturity of liability / Average maturity of asset
Appendix 1.Financial Statements 2.Key Figures
1. Financial Statements Consolidated Income Statement Consolidated Statement of Financial Position (Bn KRW) 2021 2022 2023 Operating Revenue 2,941.2 3,787.0 4,478.7 Interest income 1,493.7 1,647.3 1,876.4 Installment income 588.8 610.5 827.7 Other interest income 904.9 1,036.8 1,048.7 Fee income 161.0 158.7 161.7 Lease income 1,109.4 1,799.8 2,185.5 Gain on sales of loan receivables 7.9 24.3 53.7 Others 169.2 156.9 201.4 Operating Expense 2,469.8 3,311.8 4,108.1 Interest expense 557.7 711.8 1,087.4 Fee expense 160.1 169.8 180.7 Lease expense 906.7 1,500.2 1,776.1 Bad debt expense 139.5 198.3 279.4 Loss on sales of loan receivables 0.0 2.7 2.0 SG&A 620.2 676.0 704.2 Others 85.6 53.0 78.3 Operating Income 486.1 474.5 364.3 Non-operating Income 89.1 108.8 68.4 Equity method income 71.5 103.8 59.7 IBT 575.2 583.3 432.7 Net Income 432.6 437.1 459.9 (Bn KRW) 2021 2022 2023 Asset 34,917.1 38,647.5 39,602.0 Cash and deposit 525.1 1,973.3 1,136.4 Securities 2,654.4 2,743.0 3,371.4 Loan receivables 10,118.0 9,942.9 9,237.7 Installment assets 13,752.1 14,720.8 16,411.3 Lease receivables 2,108.3 2,044.9 2,011.3 Lease assets 4,559.0 5,538.1 5,876.9 Tangible assets 196.8 209.3 195.3 Others 1,003.3 1,475.3 1,361.7 Liabilities 29,710.3 33,017.8 33,565.9 Borrowings 28,519.1 31,399.2 31,828.8 Others 1,191.2 1,618.6 1,737.2 Equity 5,206.7 5,629.7 6,036.1 Capital 496.5 496.5 496.5 Capital surplus 388.6 388.6 388.6 Retained earnings 4,228.8 4,665.9 5,122.1 Others 92.8 78.7 28.8 , Excluding FX and derivatives effect
2. Key Figures (Bn KRW) 2021 2022 2023 Financial Assets 31,340.7 33,271.6 34,526.7 Auto 24,322.6 26,061.3 28,341.9 New car 14,790.8 15,801.0 17,496.6 Lease/rent 6,736.1 7,641.4 7,933.1 Used car 2,795.7 2,618.8 2,912.2 Non-Auto 7,018.2 7,210.4 6,184.9 P-Loan 2,263.2 1,874.9 978.2 Mortgage 3,640.0 3,415.9 3,156.7 PF 806.2 1,571.3 1,528.2 Others 308.7 348.3 521.8 (Bn KRW) 2021 2022 2023 Asset Quality 30+ Delinquency 0.94% 1.04% 0.92% Substandard and below asset ratio 2.19% 2.17% 2.12% Total provision /30+ receivables 274.0% 250.2% 278.1% Leverage 7.2x 7.4x 7.2x Total assets 34,412.2 37,977.3 39,009.0 Total capital (previous quarter) 4,780.2 5,149.0 5,450.6 Debt Balance 28,209.0 30,818.0 31,360.5 Liquidity 4,927.5 6,958.1 7,005.8 Cash 1,650.0 2,925.5 2,514.6 Credit Line 3,277.5 4,032.6 4,491.2 , Based on separate financial statements , Based on managerial accounting
THE END

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2023_EN. HYUNDAI CAPITAL SERVICES 2023 PERFORMANCE

  • 2. Disclaimer This presentation and its contents have been prepared by Hyundai Capital Services, Inc. (HCS or the Company) solely for information purposes, and may not be reproduced, published, redistributed, or transferred, directly or indirectly to any other person, in whole or in part, for any purpose. 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 herein. This presentation shall 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 contents such as market or industry information have been sourced internally or from various associations. The data contained in this presentation is current as of the date hereof, but the Company shall not be liable for any updates or verification of the contents thereafter. Certain information and statements in this presentation contain estimates and other forward-looking statements which should be approached with caution. The Company shall not be responsible for any losses or damages incurred based on these forward- looking statements.
  • 3. Hyundai Capital Services (HCS) Leading Captive Finance Company in the Market Credit Ratings Domestic Business Portfolio Auto captive Auto maker 82.1% Auto 鐃 17.9% Non-Auto Key Figures Financial Assets 34.5 TKRW IBT 432.7 Bn KRW Shareholders Global 2022 2023 2024 AA+ AA AA- A3 Baa1 Baa2 2022 2023 2024 1 Hyundai Motor Group (HMG) 99.9% ownership 59.7% 40.1% Hyundai Motor KIA Rating agencies: Domestic (NICE, Korea Ratings, Korea Investors Service), Global (Moodys)
  • 4. 9.9 15.1 7.2 11.6 87 100 142 163 76,814 75,809 81,760 Hyundai Motor Group (HMG) Record High Operating Income as a Result of Strong Car Sales and Improved Sales Mix HMG Sales Mix and Profitability Global sales boosted by strong performance in major markets despite internal and external uncertainties ASP (Average Selling Price) continued to rise with increased share of high ASP models such as Genesis and SUV HMG Global Car Sales 6,666 6,845 7,306 2021 2022 2023 27.0 28.3 2022 2023 56.8% 59.1% 31.9 33.9 2022 2023 65.0% 68.1% Profitability growth from stable car sales and high ASP vehicle mix Operating income Operating margin Revenues (T KRW) 8.4% 11.6% 6.9% 9.3% 2022 2023 2022 2023 (K units) Car Sales by Region Global HMG Global Car Sales Others India Europe North Americas Korea High ASP Models ASP (Mn KRW) 2 1,230 1,329 2022 2023 1,809 2,092 2022 2023 1,117 1,243 2022 2023 810 860 2022 2023 Korea North Americas Europe India HMC KIA HMC KIA 24% 12% 17% 29% 18% 7,306 2023 HMC, KIA Biz. Performance Report, Wholesale HMC North Americas, KIA US HMC Europe, KIA Western Europe HMC Genesis+SUV, KIA RV
  • 5. Asset Auto-Centric Asset Portfolio Based on Strong HMG Sales Support Auto Non-Auto New cars: Asset growth from normalized production & robust sales Lease: Continued growth, with focus on high ASP models Used cars: Offering captive financing for HMGs CPO business P-Loan: Decreased in asset portion (2.8%) PF: Limited risk, with focus on senior tranche, metropolitan, residential exposure (4.4%) New Car Lease Used car 71.1% 73.5% 73.3% 76.8% M/S HMG Sales (K units) 1,341 1,262 1,230 1,329 X-sell % Prime % 65.7% 62.9% 62.3% 69.2% 86.5% 87.5% 91.3% 90.4% 75.9% 77.6% 78.3% 82.1% Portion 3 15.5 14.8 15.8 17.5 6.1 6.7 7.6 7.9 2.7 2.8 2.6 2.9 24.2T 24.3T 26.1T 28.3T 2020 2021 2022 2023 (T KRW) 2.2 2.3 1.9 1.0 3.5 3.6 3.4 3.2 0.4 0.8 1.6 1.5 0.4 0.3 0.3 0.5 6.5T 7.0T 7.2T 6.2T 2020 2021 2022 2023 P-Loan Mortgage Others PF 21.1% 22.4% 21.7% 17.9% Portion (T KRW) NICE CB Grades 1~4 1H21 Credit score 780 and above (21 credit score scheme in place)
  • 6. P&L Competitive Auto Finance and Pre-emptive Risk Mgmt. Mitigated P&L Impact from Market Uncertainties Summary of Financial Statement (Bn KRW) Key Message Revenue increase from auto-centric asset growth (34.5T, YoY +3.8%) Lease income Operating Revenue Operating Expense Operating Income Interest expense Installment income IBT Bad debt expense Non-operating Income Equity Method income - Sharp increase in Installment Income from enhanced product competitiveness - Lease Income boosted from increased demand for high ASP vehicle leasing Operating Expense increased amid high interest rate trends and concerns for economic slowdown 1.48% 0.94% 1.04% 0.92% 2020 2021 2022 2023 30+ % - Interest expense increased due to sharp interest rate hikes - Bad Debt Expense reflecting industry-wide deterioration of asset quality Stable delinquency% from pre-emptive risk management , Excl. FX and derivatives impact Reflects 40.5Bn KRW equity method losses by impairment assessment of HCBE after Allane acquisition Reflecting reduction in corporate tax expense of 99.3Bn, due to change in the accounting treatment of deferred corporate tax following the dividend payout of HCUK, BHAF Net Income 4 SG&A 2021 1,109.4 2,941.2 2,469.8 486.1 557.7 588.8 575.2 139.5 89.1 71.5 432.6 620.2 2022 1,799.8 3,787.0 3,311.8 474.5 711.8 610.5 583.3 198.3 108.8 103.8 437.1 676.0 2023 2,185.5 4,478.7 4,108.1 364.3 1,087.4 827.7 432.7 279.4 68.4 59.7 459.9 704.2 +18.3% YoY +24.0% -23.2% +52.8% +35.6% -25.8% +21.4% +40.9% -37.2% -42.5% +5.2% +4.2%
  • 7. 7.6x 7.2x 7.4x 7.2x 2020 2021 2022 2023 Domestic Bonds 56% Overseas Bonds 17% ABS 17% Bank 10% CP 1% Key Index Solid Financial Position Maintained Within Regulatory Guidelines Provision Funding Regulatory reserves managed above government guideline(100%) Stable funding through portfolio diversification 120.7% 122.6% 129.4% 131.1% 2020 2021 2022 2023 Debt Balance 31.4T KRW 2023 Guideline 6M Coverage 125% 100% ALM 123% 100% Liquidity Stable liquidity mgmt. based on conservative internal guideline Capital Adequacy Leverage managed well below regulatory guideline (9x) USD JPY AUD CHF CNY EUR HKD SGD 5 No dividend payout 21~23 Leading the ESG bond market, through issuance of Green Bonds & SLB (Sustainability-linked Bonds) Asset Leverage (Asset/Equity) Regulatory Reserve Coverage Total liquidity / 6M coverage Average maturity of liability / Average maturity of asset
  • 9. 1. Financial Statements Consolidated Income Statement Consolidated Statement of Financial Position (Bn KRW) 2021 2022 2023 Operating Revenue 2,941.2 3,787.0 4,478.7 Interest income 1,493.7 1,647.3 1,876.4 Installment income 588.8 610.5 827.7 Other interest income 904.9 1,036.8 1,048.7 Fee income 161.0 158.7 161.7 Lease income 1,109.4 1,799.8 2,185.5 Gain on sales of loan receivables 7.9 24.3 53.7 Others 169.2 156.9 201.4 Operating Expense 2,469.8 3,311.8 4,108.1 Interest expense 557.7 711.8 1,087.4 Fee expense 160.1 169.8 180.7 Lease expense 906.7 1,500.2 1,776.1 Bad debt expense 139.5 198.3 279.4 Loss on sales of loan receivables 0.0 2.7 2.0 SG&A 620.2 676.0 704.2 Others 85.6 53.0 78.3 Operating Income 486.1 474.5 364.3 Non-operating Income 89.1 108.8 68.4 Equity method income 71.5 103.8 59.7 IBT 575.2 583.3 432.7 Net Income 432.6 437.1 459.9 (Bn KRW) 2021 2022 2023 Asset 34,917.1 38,647.5 39,602.0 Cash and deposit 525.1 1,973.3 1,136.4 Securities 2,654.4 2,743.0 3,371.4 Loan receivables 10,118.0 9,942.9 9,237.7 Installment assets 13,752.1 14,720.8 16,411.3 Lease receivables 2,108.3 2,044.9 2,011.3 Lease assets 4,559.0 5,538.1 5,876.9 Tangible assets 196.8 209.3 195.3 Others 1,003.3 1,475.3 1,361.7 Liabilities 29,710.3 33,017.8 33,565.9 Borrowings 28,519.1 31,399.2 31,828.8 Others 1,191.2 1,618.6 1,737.2 Equity 5,206.7 5,629.7 6,036.1 Capital 496.5 496.5 496.5 Capital surplus 388.6 388.6 388.6 Retained earnings 4,228.8 4,665.9 5,122.1 Others 92.8 78.7 28.8 , Excluding FX and derivatives effect
  • 10. 2. Key Figures (Bn KRW) 2021 2022 2023 Financial Assets 31,340.7 33,271.6 34,526.7 Auto 24,322.6 26,061.3 28,341.9 New car 14,790.8 15,801.0 17,496.6 Lease/rent 6,736.1 7,641.4 7,933.1 Used car 2,795.7 2,618.8 2,912.2 Non-Auto 7,018.2 7,210.4 6,184.9 P-Loan 2,263.2 1,874.9 978.2 Mortgage 3,640.0 3,415.9 3,156.7 PF 806.2 1,571.3 1,528.2 Others 308.7 348.3 521.8 (Bn KRW) 2021 2022 2023 Asset Quality 30+ Delinquency 0.94% 1.04% 0.92% Substandard and below asset ratio 2.19% 2.17% 2.12% Total provision /30+ receivables 274.0% 250.2% 278.1% Leverage 7.2x 7.4x 7.2x Total assets 34,412.2 37,977.3 39,009.0 Total capital (previous quarter) 4,780.2 5,149.0 5,450.6 Debt Balance 28,209.0 30,818.0 31,360.5 Liquidity 4,927.5 6,958.1 7,005.8 Cash 1,650.0 2,925.5 2,514.6 Credit Line 3,277.5 4,032.6 4,491.2 , Based on separate financial statements , Based on managerial accounting