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2Q24 HYUNDAI CAPITAL SERVICES EARNINGS RELEASE

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2Q24 HYUNDAI CAPITAL SERVICES EARNINGS RELEASE

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EARNINGS RELEASE 2Q 2024
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 82.6% Auto 鐃 17.4% Non-Auto Key Figures Financial Assets 34.4 TKRW IBT 344.5 Bn KRW Shareholders Global 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), Global (Moodys) 2022 2023 2024 AA+ AA AA- AAA As of 24.06 End
76,814 75,809 81,760 Hyundai Motor Group (HMG) Maintaining High Profitability based on Continued Impact from Improved Sales Mix HMG Sales Mix and Profitability Slight decrease in sales from temporary shutdown of domestic production facility for electrification Increased share of high ASP models such as Genesis and SUV HMG Global Car Sales 6,666 6,845 7,306 2021 2022 2023 Maintaining high profitability from improved sales mix focused on high ASP models and hybrid vehicles Operating income Operating margin Revenues (T KRW) (K units) Car Sales by Region Global HMG Global Car Sales Others India Europe North Americas Korea 2 Korea North Americas Europe India HMC KIA HMC, KIA Biz. Performance Report, Wholesale HMC North Americas, KIA US HMC Europe, KIA Western Europe HMC Genesis+SUV, KIA RV 3,659 3,619 1H23 1H24 39,215 39,985 23% 12% 17% 31% 17% 3,619 1H24 Portion of High ASP Models HMC KIA 690 622 1H23 1H24 1,034 1,130 1H23 1H24 640 616 1H23 1H24 434 437 1H23 1H24 58.3% 61.7% 1H23 1H24 65.4% 70.4% 1H23 1H24 +3.4%p +5.0%p 12.6% 13.1% 9.8% 9.1% 6.3 7.1 7.8 7.9 80 86 50 54 1H23 1H24 1H23 1H24
77.6% 78.3% 82.1% 82.6% 14.8 15.8 17.5 17.2 6.7 7.6 7.9 8.1 2.8 2.6 2.9 3.2 24.3T 26.1T 28.3T 28.5T 2021 2022 2023 1H24 2.3 1.9 1.0 0.8 3.6 3.4 3.2 3.2 0.8 1.6 1.5 1.6 0.3 0.3 0.5 0.5 7.0T 7.2T 6.2T 6.0T 2021 2022 2023 1H24 Asset Stronger Captive Role Supporting HMG Sales, Resulted in Highest Auto Portion in 12 Years Auto Non-Auto New cars: Maintaining asset size despite temporary production gap Lease: Continued growth, with focus on high ASP models Used cars: Offering captive financing for HMGs CPO business P-Loan: 100% X-Sell to Auto Finance customers PF: Sound portfolio focused on term loan, senior tranche, metropolitan exposure (4.5%) New Car Lease Used car Portion 3 (T KRW) P-Loan Mortgage Others PF Portion (T KRW) 73.5% 73.3% 76.8% 77.0% HMG M/S P-Loan % 7.2% 5.6% 2.8% 2.2% 22.4% 21.7% 17.9% 17.4%
P&L Enhanced Profitability from Auto-centric Revenue Growth and Improved Asset Quality Summary of Financial Statement (Bn KRW) Key Message Revenue increase from auto-centric asset growth (34.4T, YoY +3.0%) 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 30+ % , 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 2022 3,787.0 3,311.8 474.5 711.8 583.3 1,799.8 610.5 198.3 108.8 103.8 437.1 676.0 2023 4,478.7 4,108.1 364.3 1,087.4 432.7 2,185.5 827.7 279.4 68.4 59.7 459.9 704.2 1.48% 0.94% 1.04% 0.92% 0.88% 2020 2021 2022 2023 1H24 Focus on profitability of Non-Auto, increase in Operating Income - Increased Operating income from Revenue growth & stabilized Bad debt expense - Increased Equity method income reflecting improved P&L of overseas entities +11.4% YoY +9.8% +28.4% +13.0% +40.0% +26.1% +16.6% -4.8% +247.9% +395.8% +46.4% +5.8% 1H23 2,170.8 1,936.4 233.0 519.0 246.0 1,030.1 385.2 112.7 13.0 8.5 188.3 333.7 1H24 2,419.1 2,126.4 299.3 586.7 344.5 1,200.6 485.6 107.3 45.2 42.3 275.8 353.0 Delinquency at record-low level, while maintaining below 1% level for over a year
Key Index Solid Financial Position Maintained Within Regulatory Guidelines Provision Funding Regulatory reserves managed above government guideline(100%) Stable funding through portfolio diversification Debt Balance 30.5T KRW 1H24 Guideline 6M Coverage 121% 100% ALM 124% 100% Liquidity Stable liquidity mgmt. based on conservative internal guideline Capital Adequacy Leverage managed well below regulatory guideline (9x) 5 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 Domestic Bond 51% Overseas Bond 20% ABS 16% Bank 10% CP 3% USD JPY AUD CHF CNY EUR HKD SGD No dividend Payout since 21 122.6% 129.4% 131.1% 131.9% 2021 2022 2023 1H24 7.2x 7.4x 7.2x 6.8x 2021 2022 2023 1H24
Appendix 1.Financial Statements 2.Key Figures
1. Financial Statements Consolidated Income Statement Consolidated Statement of Financial Position (Bn KRW) 2021 2022 2023 1H24 Operating Revenue 2,941.2 3,787.0 4,478.7 2,419.1 Interest income 1,493.7 1,647.3 1,876.4 1,004.6 Installment income 588.8 610.5 827.7 485.6 Other interest income 904.9 1,036.8 1,048.7 519.0 Fee income 161.0 158.7 161.7 89.5 Lease income 1,109.4 1,799.8 2,185.5 1,200.6 Gain on sales of loan receivables 7.9 24.3 53.7 33.3 Others 169.2 156.9 201.4 91.1 Operating Expense 2,469.8 3,311.8 4,108.1 2,126.4 Interest expense 557.7 711.8 1,087.4 586.7 Fee expense 160.1 169.8 180.7 89.5 Lease expense 906.7 1,500.2 1,776.1 952.6 Bad debt expense 139.5 198.3 279.4 107.3 Loss on sales of loan receivables 0.0 2.7 2.0 1.1 SG&A 620.2 676.0 704.2 353.0 Others 85.6 53.0 78.3 36.2 Operating Income 486.1 474.5 364.3 299.3 Non-operating Income 89.1 108.8 68.4 45.2 Equity method income 71.5 103.8 59.7 42.3 IBT 575.2 583.3 432.7 344.5 Net Income 432.6 437.1 459.9 275.8 (Bn KRW) 2021 2022 2023 1H24 Asset 34,917.1 38,647.5 39,602.0 39,244.4 Cash and deposit 525.1 1,973.3 1,136.4 844.6 Securities 2,654.4 2,743.0 3,371.4 3,189.4 Loan receivables 10,118.0 9,942.9 9,237.7 9,270.8 Installment assets 13,752.1 14,720.8 16,411.3 16,125.0 Lease receivables 2,108.3 2,044.9 2,011.3 2,107.6 Lease assets 4,559.0 5,538.1 5,876.9 5,977.5 Tangible assets 196.8 209.3 195.3 159.4 Others 1,003.3 1,475.3 1,361.7 1,570.1 Liabilities 29,710.3 33,017.8 33,565.9 32,878.6 Borrowings 28,519.1 31,399.2 31,828.8 31,238.3 Others 1,191.2 1,618.6 1,737.2 1,640.3 Equity 5,206.7 5,629.7 6,036.1 6,365.8 Capital 496.5 496.5 496.5 496.5 Capital surplus 388.6 388.6 388.6 388.6 Retained earnings 4,228.8 4,665.9 5,122.1 5,397.9 Others 92.8 78.7 28.8 82.7 , Excluding FX and derivatives effect
2. Key Figures (Bn KRW) 2021 2022 2023 1H24 Financial Assets 31,340.7 33,271.6 34,526.7 34,443.7 Auto 24,322.6 26,061.3 28,341.9 28,460.1 New car 14,790.8 15,801.0 17,496.6 17,168.8 Lease/rent 6,736.1 7,641.4 7,933.1 8,133.1 Used car 2,795.7 2,618.8 2,912.2 3,158.2 Non-Auto 7,018.2 7,210.4 6,184.9 5,983.6 P-Loan 2,263.2 1,874.9 978.2 762.6 Mortgage 3,640.0 3,415.9 3,156.7 3,171.3 PF 806.2 1,571.3 1,528.2 1,558.0 Others 308.7 348.3 521.8 491.7 (Bn KRW) 2021 2022 2023 1H24 Asset Quality 30+ Delinquency 0.94% 1.04% 0.92% 0.88% Substandard and below asset ratio 2.19% 2.17% 2.12% 2.15% Total provision /30+ receivables 274.0% 250.2% 278.1% 284.1% Leverage 7.2x 7.4x 7.2x 6.8x Total assets 34,412.2 37,977.3 39,009.0 38,497.4 Total capital (previous quarter) 4,780.2 5,149.0 5,450.6 5,652.4 Debt Balance 28,209.0 30,818.0 31,360.5 30,492.8 Liquidity 4,927.5 6,958.1 7,005.8 6,003.4 Cash 1,650.0 2,925.5 2,514.6 1,615.9 Credit Line 3,277.5 4,032.6 4,491.2 4,387.5 , Based on separate financial statements , Based on managerial accounting
THE END

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2Q24 HYUNDAI CAPITAL SERVICES EARNINGS RELEASE

  • 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 82.6% Auto 鐃 17.4% Non-Auto Key Figures Financial Assets 34.4 TKRW IBT 344.5 Bn KRW Shareholders Global 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), Global (Moodys) 2022 2023 2024 AA+ AA AA- AAA As of 24.06 End
  • 4. 76,814 75,809 81,760 Hyundai Motor Group (HMG) Maintaining High Profitability based on Continued Impact from Improved Sales Mix HMG Sales Mix and Profitability Slight decrease in sales from temporary shutdown of domestic production facility for electrification Increased share of high ASP models such as Genesis and SUV HMG Global Car Sales 6,666 6,845 7,306 2021 2022 2023 Maintaining high profitability from improved sales mix focused on high ASP models and hybrid vehicles Operating income Operating margin Revenues (T KRW) (K units) Car Sales by Region Global HMG Global Car Sales Others India Europe North Americas Korea 2 Korea North Americas Europe India HMC KIA HMC, KIA Biz. Performance Report, Wholesale HMC North Americas, KIA US HMC Europe, KIA Western Europe HMC Genesis+SUV, KIA RV 3,659 3,619 1H23 1H24 39,215 39,985 23% 12% 17% 31% 17% 3,619 1H24 Portion of High ASP Models HMC KIA 690 622 1H23 1H24 1,034 1,130 1H23 1H24 640 616 1H23 1H24 434 437 1H23 1H24 58.3% 61.7% 1H23 1H24 65.4% 70.4% 1H23 1H24 +3.4%p +5.0%p 12.6% 13.1% 9.8% 9.1% 6.3 7.1 7.8 7.9 80 86 50 54 1H23 1H24 1H23 1H24
  • 5. 77.6% 78.3% 82.1% 82.6% 14.8 15.8 17.5 17.2 6.7 7.6 7.9 8.1 2.8 2.6 2.9 3.2 24.3T 26.1T 28.3T 28.5T 2021 2022 2023 1H24 2.3 1.9 1.0 0.8 3.6 3.4 3.2 3.2 0.8 1.6 1.5 1.6 0.3 0.3 0.5 0.5 7.0T 7.2T 6.2T 6.0T 2021 2022 2023 1H24 Asset Stronger Captive Role Supporting HMG Sales, Resulted in Highest Auto Portion in 12 Years Auto Non-Auto New cars: Maintaining asset size despite temporary production gap Lease: Continued growth, with focus on high ASP models Used cars: Offering captive financing for HMGs CPO business P-Loan: 100% X-Sell to Auto Finance customers PF: Sound portfolio focused on term loan, senior tranche, metropolitan exposure (4.5%) New Car Lease Used car Portion 3 (T KRW) P-Loan Mortgage Others PF Portion (T KRW) 73.5% 73.3% 76.8% 77.0% HMG M/S P-Loan % 7.2% 5.6% 2.8% 2.2% 22.4% 21.7% 17.9% 17.4%
  • 6. P&L Enhanced Profitability from Auto-centric Revenue Growth and Improved Asset Quality Summary of Financial Statement (Bn KRW) Key Message Revenue increase from auto-centric asset growth (34.4T, YoY +3.0%) 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 30+ % , 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 2022 3,787.0 3,311.8 474.5 711.8 583.3 1,799.8 610.5 198.3 108.8 103.8 437.1 676.0 2023 4,478.7 4,108.1 364.3 1,087.4 432.7 2,185.5 827.7 279.4 68.4 59.7 459.9 704.2 1.48% 0.94% 1.04% 0.92% 0.88% 2020 2021 2022 2023 1H24 Focus on profitability of Non-Auto, increase in Operating Income - Increased Operating income from Revenue growth & stabilized Bad debt expense - Increased Equity method income reflecting improved P&L of overseas entities +11.4% YoY +9.8% +28.4% +13.0% +40.0% +26.1% +16.6% -4.8% +247.9% +395.8% +46.4% +5.8% 1H23 2,170.8 1,936.4 233.0 519.0 246.0 1,030.1 385.2 112.7 13.0 8.5 188.3 333.7 1H24 2,419.1 2,126.4 299.3 586.7 344.5 1,200.6 485.6 107.3 45.2 42.3 275.8 353.0 Delinquency at record-low level, while maintaining below 1% level for over a year
  • 7. Key Index Solid Financial Position Maintained Within Regulatory Guidelines Provision Funding Regulatory reserves managed above government guideline(100%) Stable funding through portfolio diversification Debt Balance 30.5T KRW 1H24 Guideline 6M Coverage 121% 100% ALM 124% 100% Liquidity Stable liquidity mgmt. based on conservative internal guideline Capital Adequacy Leverage managed well below regulatory guideline (9x) 5 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 Domestic Bond 51% Overseas Bond 20% ABS 16% Bank 10% CP 3% USD JPY AUD CHF CNY EUR HKD SGD No dividend Payout since 21 122.6% 129.4% 131.1% 131.9% 2021 2022 2023 1H24 7.2x 7.4x 7.2x 6.8x 2021 2022 2023 1H24
  • 9. 1. Financial Statements Consolidated Income Statement Consolidated Statement of Financial Position (Bn KRW) 2021 2022 2023 1H24 Operating Revenue 2,941.2 3,787.0 4,478.7 2,419.1 Interest income 1,493.7 1,647.3 1,876.4 1,004.6 Installment income 588.8 610.5 827.7 485.6 Other interest income 904.9 1,036.8 1,048.7 519.0 Fee income 161.0 158.7 161.7 89.5 Lease income 1,109.4 1,799.8 2,185.5 1,200.6 Gain on sales of loan receivables 7.9 24.3 53.7 33.3 Others 169.2 156.9 201.4 91.1 Operating Expense 2,469.8 3,311.8 4,108.1 2,126.4 Interest expense 557.7 711.8 1,087.4 586.7 Fee expense 160.1 169.8 180.7 89.5 Lease expense 906.7 1,500.2 1,776.1 952.6 Bad debt expense 139.5 198.3 279.4 107.3 Loss on sales of loan receivables 0.0 2.7 2.0 1.1 SG&A 620.2 676.0 704.2 353.0 Others 85.6 53.0 78.3 36.2 Operating Income 486.1 474.5 364.3 299.3 Non-operating Income 89.1 108.8 68.4 45.2 Equity method income 71.5 103.8 59.7 42.3 IBT 575.2 583.3 432.7 344.5 Net Income 432.6 437.1 459.9 275.8 (Bn KRW) 2021 2022 2023 1H24 Asset 34,917.1 38,647.5 39,602.0 39,244.4 Cash and deposit 525.1 1,973.3 1,136.4 844.6 Securities 2,654.4 2,743.0 3,371.4 3,189.4 Loan receivables 10,118.0 9,942.9 9,237.7 9,270.8 Installment assets 13,752.1 14,720.8 16,411.3 16,125.0 Lease receivables 2,108.3 2,044.9 2,011.3 2,107.6 Lease assets 4,559.0 5,538.1 5,876.9 5,977.5 Tangible assets 196.8 209.3 195.3 159.4 Others 1,003.3 1,475.3 1,361.7 1,570.1 Liabilities 29,710.3 33,017.8 33,565.9 32,878.6 Borrowings 28,519.1 31,399.2 31,828.8 31,238.3 Others 1,191.2 1,618.6 1,737.2 1,640.3 Equity 5,206.7 5,629.7 6,036.1 6,365.8 Capital 496.5 496.5 496.5 496.5 Capital surplus 388.6 388.6 388.6 388.6 Retained earnings 4,228.8 4,665.9 5,122.1 5,397.9 Others 92.8 78.7 28.8 82.7 , Excluding FX and derivatives effect
  • 10. 2. Key Figures (Bn KRW) 2021 2022 2023 1H24 Financial Assets 31,340.7 33,271.6 34,526.7 34,443.7 Auto 24,322.6 26,061.3 28,341.9 28,460.1 New car 14,790.8 15,801.0 17,496.6 17,168.8 Lease/rent 6,736.1 7,641.4 7,933.1 8,133.1 Used car 2,795.7 2,618.8 2,912.2 3,158.2 Non-Auto 7,018.2 7,210.4 6,184.9 5,983.6 P-Loan 2,263.2 1,874.9 978.2 762.6 Mortgage 3,640.0 3,415.9 3,156.7 3,171.3 PF 806.2 1,571.3 1,528.2 1,558.0 Others 308.7 348.3 521.8 491.7 (Bn KRW) 2021 2022 2023 1H24 Asset Quality 30+ Delinquency 0.94% 1.04% 0.92% 0.88% Substandard and below asset ratio 2.19% 2.17% 2.12% 2.15% Total provision /30+ receivables 274.0% 250.2% 278.1% 284.1% Leverage 7.2x 7.4x 7.2x 6.8x Total assets 34,412.2 37,977.3 39,009.0 38,497.4 Total capital (previous quarter) 4,780.2 5,149.0 5,450.6 5,652.4 Debt Balance 28,209.0 30,818.0 31,360.5 30,492.8 Liquidity 4,927.5 6,958.1 7,005.8 6,003.4 Cash 1,650.0 2,925.5 2,514.6 1,615.9 Credit Line 3,277.5 4,032.6 4,491.2 4,387.5 , Based on separate financial statements , Based on managerial accounting