CARDS CREDIT INSURANCE SERVICES TECHNOLOGY
Annual Report 2012
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Address
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Websites
buyway.be buyway.lu buywaypf.be buyway-prepaid.be
For more information: arlette.perreman@buyway.be +32 (0)2 209 81 83 Follow us on:
Annual Report 2012 2 3 4 5 6 7 8 9 0 2 3
Profile
p. 4
Foreword
p. 6
Management
p. 8
Key facts and history
p. 10
Key figures
p. 12
Partnerships
p. 15
Innovations
p. 18
Business Process Outsourcing offer
p. 20
Compliance
p. 22
Risk management
p. 23
Values
p. 24
Sustainable development
p. 25
Financial reports
p. 26
ProfilE Number One in financing at Points of Sale in Belgium and Luxemburg
The specialist in consumer credit We offer a range of products and services, including: > Credit cards (now also deferred debit cards and prepaid cards). > Car loans. > Technical and operational partner in consumer credit management on behalf of third parties. > Loans and insurance broker.
The commercial vision We support our partners and clients: > By proposing optimal financial solutions where the client’s repayment capacity is given top priority > By offering a personalised follow-up of each portfolio, which results in improved service > With innovations by launching new products that make buying easier > By serving our partners’ clients, putting our platform at their disposal
Reliability In order to present financing solutions at points of sale, a reliable information system is required, which is managed by specialist teams. This is the challenge that our employees handle successfully day in and day out.
Leadership As leader in the field of point of sale credit in Belgium and Luxemburg, Buy Way wants to use its extraordinary expertise to become a European player in consumer credit at points of sale.
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Credit Cards – Deferred Debit Cards – Prepaid Debit Cards– Car Loans – Technical and Operational Partners – Credit and Insurance Brokers
BUY WAY personal finance > Annual Report 2012
Legal organisational chart
Apax Partners
Wallet 100 %
EEIG Buy Way Services
Buy Way Personal Finance 100 %
Buy Way Tech
KBC Consumer Finance
Fimaser
BNP Paribas Personal Finance Netherlands
Entities Buy Way Personal Finance
Buy Way Tech
The company is under Belgian law, owned by Wallet, holder of «Credit Provider» approval. Documentation «Issuer of Electronic Money» has been filed with the competent authority.
The company is 100% owned by Buy Way Personal Finance. Its technology is used by the members of EEIG, more specifically the license of the software platform SICLID.
EEIG Buy Way Services European Economic Interest Group, whose members use the technology and knowledge of Buy Way Tech. The EEIG consists of the following members:
• Buy Way Personal Finance
• BNP Paribas Personal Finance (Netherlands)
• KBC Consumer Finance
• FIMASER ( joint venture between the Carrefour Group and the BNP Paribas Personal Finance Group)
The operating costs of the EEIG are divided among the members according to a mutually established distributive formula. The EEIG is managed by Damien Guermonprez, CEO of Buy Way Personal Finance.
Apax Partners: an engaged shareholder at our side Buy Way Personal Finance is 100% owned by Wallet, a holding company with its major shareholders - the APAX France VII Fund (50.5%) and the company Altamir Amboise (38.3%), which is listed on the Paris stock exchange.
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2 FOREWORD
Foreword by the Chairman The operational result of 2012 is €16.7m – an increase of 54% compared to 2011. The Net Bank Product has risen 9% to €46.9m. The operational coefficient improved by 2 points to 56%. The result of the financial year as a whole translated into a suspension of earlier losses and was not taxed. This confirms the durability and sturdiness of the Buy Way business model in spite of the current economic crisis. Because credit at the point of sale offers clients a true service and supports economic activity, it has demonstrated its resilience in recent years. It provided additional sales of items, which is necessary for guaranteeing profitability and growth, certainly when the economic cycle is on a downward trend. From this perspective, it is an indispensable engine for consumption and therefore also for economic growth. One must also laud the wisdom of the Belgian consumer, as shown by a recent universal study, who uses consumer credit in a reasonable and accountable manner by not systematically compensating a loss of purchase power with credit. Our traditionally conservative policy in the area of risk is based on the tools that are provided to us by law. Among other things, the positive outlook of the National Bank of Belgium has allowed us for the fourth year in a row to decrease costs related to unpaid invoices. In 2012 our risk burden was €6.1m, by excluding the sale of a portfolio of losses. This was a drop of 14% compared to the previous financial year, or an interest due to default was reduced to an outstanding debt of 1.5%. We can definitely confirm the claim that 98.5% of our clients do indeed repay their debts.
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Damien Guermonprez
Christian Guiraud
This performance is the result of a team considered to be the best in the profession today. This is the professional knowledge that Buy Way puts at the disposal of its two major financial partners. This makes it currently possible to consider similar partnerships with companies abroad and guarantee additional long-term sources of income. This type of managed risk burden has allowed us to forge our way into securing debt claims in revolving credit. In the first half of 2013, this operation should be complete. This will secure the long-term financial autonomy of Buy Way, under favourable conditions. The robustness of our company and its consistent performance level are mainly due to the motivation of its employees and their high level of professionalism. I want to publicly thank all our employees for their efforts. Christian Guiraud CHAIRMAN
BUY WAY personal finance > Annual Report 2012
Foreword by the CEO: Buy Way is a dynamic company that continues to hold its unique position in the world of consumer credit. Our company’s outlook is based on four pillars: the client, our partners, the employees and innovation. Making every client an ambassador of the brand is a risky challenge. To succeed in this, we are constantly improving our performance indicators in order to provide better service to our 580,000 clients. Internally, our acceptance periods have been cut in half within one year. Our response to incoming calls is above 95% and our personal monthly expenditure statements are clearer and easier to read than ever before. Our second priority is to guarantee the stability of the company by bringing about the success of our 1,500 partner stores. At Buy Way we integrate ourselves into the buying process of our partners in order to improve their sales, regardless of the type of distribution channel (points of sales, Internet). As a matter of fact, all of them have confirmed their trust in us over the past three years and new partners have been added. With respect to our employees, we involve each one of them in a truly great adventure. Our ambition is to jointly bring about the success of each employee, discovering their talents and helping them flourish. In 2012 our absenteeism rate dropped for the fourth year running. This shows that our employees feel engaged and we are very proud of this.
Finally, Buy Way wants to participate in the current revolution within consumer credit and payments, and to provide our partners with our expertise in this field. In 2012 Buy Way confirmed its leading position in the area of innovation by developing the new IT tool Front in record time. This has implications for our partners and our clients. We will meet the challenge of financing for e-commerce and with our Business Process Outsourcing (BPO) offer, we will cover the entire chain of consumer credit. This applies to both IT and know-how, and it is the result of 25 years of experience.
This long-term vision translates into our results, which improve with every year, and provides us with the necessary resources for realising our ambitions. This is a virtuous procedure, which in 2013 we will reinforce with the securitization of our debt claims on our credit cards, a first in Belgium. Our risk management guarantees the quality of our assets and the access to competitive re-financing conditions. The passion for the client and for trade brings us closer to our partners and encourages us all towards joint innovations. At Buy Way our future is mapped out. I invite you to read our third annual report, which will help you build a picture of our company’s results in 2012 and illustrates our strategy. Happy reading! Damien Guermonprez CEO
« Our passion for the client and for trade brings us closer to ourpartners and promotes joint innovations. At Buy Way our future is mapped out. » Damien Guermonprez CEO >7
3 MANAGEMENT CEO
Damien Guermonprez
Executive Secretary
Head of Sales & Marketing
Head of ICT
Direct Sales & Marketing
Deputy Head of IT
Ugo Setti
Head of Administration
Lionel Blart
Business Applications
Human Resources
Financial Planning
Project Management
Accounting
Automotive Business Development
Ugo Setti
Head of Sales & Marketing
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Global Infrastructure ICT Security
Lionel Blart
Head of ICT
CFO
Hugues Lucet
Chantal Brabander
TimothĂŠe Pourbaix Retail
Internal Audit
Legal Facility Management
Chantal Brabander
Head of Administration
Damien Guermonprez CEO
Hugues Lucet CFO
BUY WAY personal finance > Annual Report 2012
Head of Risks Jérôme Vallée
Head of Compliance & Indebtedness Thierry Genard
Risk Assessment & Direct Granting
Compliance
Scoring & Expert Systems
Indebtedness
Credit Collection & Litigation
Fraud
Board of Directors of Buy Way Personal Finance: Christian GUIRAUD, Chairman Monique COHEN, Director
Timothée Pourbaix
Deputy Head of IT
Jérôme Vallée
Head of Risks
Thierry Genard
Head of Compliance & Indebtedness
Guillaume COUSSERAN, Director Jacques CAMPAGNE-IBARCQ, Director Apax Partners, represented by: Romain DUTARTRE, Director Damien GUERMONPREZ, Managing Director >9
4 KEY FACTS AND HISTORY Noteworthy facts Development of a new IT tool: Front (Retail Solution) and Back (Tamtam). Independent and skilled players developed our very own information tool, Front. Our new IT tools, Front (Retail Solution) and Back (Tamtam), were developed internally by the Buy Way teams and in collaboration with our EEIG partners. We began to implement these among partners in the second half of 2012. Handing the keys to the KIA over to the competition winners.
This success facilitated a quick deployment with new partners, such as Rossel. The market has welcomed Retail Solution particularly favourably.
Buy Way: the brand with know-how Buy Way Personal Partner has been an independent player in the consumer credit market in Belgium and Luxemburg since October 2010. Its entry into this market has provided a new spirit, the enthusiasm of a start-up and future prospects that grow day by day! All the Buy Way teams are based on the Boulevard Anspach in the centre of Brussels. We comprise a team of 250 professionals, passionately motivated by our various activities. Every day we reinvent our profession by taking on new challenges.
A HISTORY OF PERMANENT CHANGE 1988
1996
2000
• Fimaser, a 40/60 joint • Cetelem, a 60/40 • The Cetelem Group takes over 100% of Cetelem venture between the joint venture Belgium’s shares and Cetelem Group and between the GB-INNO-BM, was Cetelem Group and enters the Luxemburg established. the GIB Group, was market. set up in Belgium. • Agreement signed with the • Promotion of credit. KBC Group to make the technology of revolving credit cards available to KBC, Centea and CBC entities. > 10
2005 • Internet channel.
2006
• Car loans.
2007
• Brokerage channel.
2008 • Co-branded Visa and MasterCard cards. •P urchase of UCBEL, specialist in mortgages. Cetelem Belgium is renamed BNP Paribas Personal Finance Belgium. • Put up for sale after the decision of the European Commission as a result of the takeover of Fortis by BNP Paribas.
BUY WAY personal finance > Annual Report 2012
Key facts about our activities Retail:
Direct:
• Increase of 10% of the number of recruited clients.
• 11% increase in activities in 2012 • Successful online competition • 32% increase in the use of cards for online purchases
• Launch the new agreements with the Groupe Rossel, Numericable, Kvik, Alain Afflelou, Meno and But chains. • Successful launch of the prepaid card for the Alvadis network. • Launch of e-commerce activity.
Car loans:
Brokerage in credit and insurances:
•S uccessful collaboration with Record Bank is confirmed •R enewal of the exclusive partnership agreement with KIA
• Signing various partnerships with lenders and insurers.
Find us on
2009
2011
• Merger with Fidexis, which is initially 51% owned by Dexia, and 49% by the French company Laser Cofinoga.
• Change of name to Buy Way Personal Finance and Buy Way Services.
2010
• Takeover by Apax Partners and transfer of mortgage activities to Fortis.
• Sale of 40% in KBC Consumer Finance. • Prepaid card.
: Buy Way
2012 • Smartphone channel.
2013 • Securitization.
• E-commerce channel.
• First Buy Way Awards.
• Activities of the Finance department.
• Training of sellers with diploma.
• New partners «Media & Leisure». • Second generation Prepaid Card. • BPO offer. • New IT tools. > 11
5 KEY FIGURES OF buy way personal finance Production (€ M.)
Perimeter of consumer credit (Ifrs data)
Credit cards – New financing 2008 Net Banking Income (€ M.) 43
38 2010
Net profit before taxes (€ M.) 46,7 5.4
2011
2012
Equity (€ M.) 111.4
2010
10.8
16.7
76.8
2009
239
2010
224
2011
243
2012 2011
18.9 %
259
2012
Solvency ratio ( %) 108.4
268
21.7 %
12.1 %
Consumer Loans – Direct & Brokers 2008
32
2009
19
2010
21
2011
4
2012 6 2010
2011
2012
Amount of credits granted (€ M.) 336
2010
333
2011
2010
2011
2012
Cost of Risk* (% of outstanding debt)
357
2012
# clients
1.9%
1.6%
1.5%
2010
2011
2012
2008
35
2009
26
2010
23
2011
22
2012
25
Consumer Loans – Cars 2008
# active clients
516,381 552,536 585,258
Consumer Loans – Retail
60
2009
251,797 263,379 272,496
63
2010
68
2011
64
2012 2010
2011
2012
# employees (full time)
2011
2012
Ratio of efficiency (Overheads/NBI)
216
220
234
2010
2011
2012
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2010
61 %
2010 *
58%
2011
67
56%
2012
Except sale of the losses.
> TOTAL production 2008 2009 2010 2011
396
2012
357 (+7 %)
347 336 333
BUY WAY personal finance > Annual Report 2012
Outstanding debt (€ M.) Credit cards – Outstanding 2008
250
2009
236
2010
234
2011
253
2012 274
Consumer Loans – Direct & Brokers 2008
New cards
100
2009
2009
86
2010
74
2011
2012 53,865
2012 34
New loans
Consumer Loans – Retail 30
2009
26
2010
25
2011
24
40,962
2011 51,899
52
2008
53,455
2010
2009
25,391
2010
22,825
2011
19,118
2012
24,879
2012 25 Cards + Loans Consumer Loans – Cars
2009
2008
2010
107
2009
2012
71,017
2012 78,744 (+10 %)
155
2011
63,787
2011
135
2010
78,846
164 68
170*
> total OUTSTANDING 2008
488
2009
485
2010
488
2011
493 401
2012
503* (+2 %)
* Of which 102 discounted.
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5 KEY FIGURES OF EEIG buy way services Number of files processed 2008 2009
660,333 771,410
2010
1,017,242
2011 1,139,835 2012 1,196,999 (+5 %)
Other key figures Social statistics (Buy Way Entities): > > > > > >
250 employees, equivalent to 234 FTEs Men: 51% Women: 49% Average age: 34 years 13 nationalities Absenteeism rate: 4.1%
Absenteeism rate: 7 % 5,30 %
4,84 %
4,10 %
Volume of client communications in 2012: > 1 million calls handled > 4,2 million mail items sent and received > 5,1 million emails sent and received
> 14
2009
2010
2011
2012
BUY WAY personal finance > Annual Report 2012
6 PARTNERSHIPS Partnerships with major chains and independent stores As an active and committed partner, Buy Way supports chain stores and independent distributors. We put at their disposal the tools that allow them to achieve two essential objectives: to increase their sales turnover and enhance their relationship with their clients. > Increasing our partners’ turnover by:
> Enhancing their relationship with their clients due to:
- Increasing the frequency of visits to points of sale
- A relationship with clients which begins at the point of sale
- Significantly enlarging the average purchase
- Solutions adapted to their needs -A long-term relationship supported by permanent communication channels
Cards
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6 PARTNERSHIPS (CONT’D) Retail
Media and leisure activities
Buy Way aims to continue to take market share in its two historic markets, Belgium and the Grand Duchy of Luxembourg. However, we have also expanded to the north of France by serving Belgian clients in French stores (Conforama, But).
A new trend in the credit market favours companies that are active in the media and leisure activities with regard to financial solutions.
Buy Way entered into new partnerships with Kvik, Meno and Alain Afflelou. After the takeover of Photo Hall, Buy Way concluded an agreement with the new owner of the chain and its 17 stores. Electrics and Multimedia:
Supermarkets and Hypermarkets: Votre Contrat de Confiance
Furniture:
Kitchens:
Specialists:
> 16
Uw Akte van Vertrouwen
Buy Way has concluded collaboration agreements with Numericable (telecom operator), Fit For Fun (sport) and Groupe Rossel (digital subscriptions), which has enabled us to present our solutions for e-commerce to our online clients. Leisure and Media:
BUY WAY personal finance > Annual Report 2012
Financial services
Automobile dealerships
As an independent player, Buy Way Personal Finance is in a unique position, which allows it to forge innovative partnerships with other players in the financial sector.
Buy Way Personal Finance has also been able to carve out an important niche in the sector of car loans and financing recreational vehicles with the KIA brand as a reference partner.
Banks:
In 2012, Buy Way and KIA Motors BELGIUM signed a new partnership agreement with which they confirm the trust that has been built between the two brands in recent years.
>K BC Consumer Finance is a member of the EEIG and enjoys the use of the Buy Way Services platform. >F imaser is a joint venture between the bank of the Carrefour Group and the BNP Paribas Personal Finance Group, and enjoys the use of this same platform.
Automobile sector:
> R ecord Bank has an agreement with us on refinancing car loan activities and has a partnership with our brokerage activities. > Banca Monte Paschi Belgio: management of revolving credit cards issued by the bank. Insurers: Insurers allow the client to take out cover in case of damage or a problem created by a change in their private or professional circumstances.
> Borrowing insurance: This protects the consumer and their purchases in case of unemployment, disability, invalidity or death, and/or in case their card is lost or stolen. > Assistance insurance: For assistance abroad or for breakdown assistance, for citizen’s and legal advice, and a telephone line for travel information. > Hospitalization insurance Brokers Through this new channel, Buy Way positions itself as a broker and is able to offer its clients fully customised and detailed solutions.
« In 2012, we enriched our portfolio with new partners. We also had a significant breakthrough in the field of brokerage and we presented our solutions for e-commerce. » Ugo Setti Head of Sales & Marketing > 17
7 Innovations In the area of innovation, Buy Way focuses on the development of its new IT tool, the implementation of solutions for e-commerce and the launching of its second generation prepaid card.
Retail Solution
Makro online shop
The Retail Solution sales tool offers the possibility to register – online and remotely – for a credit line opening, with immediate decision-making.
E-commerce is becoming a fact of life and all retailers need to be on-board.
Retail Solution simplifies the selling task for the sales people and guarantees centralised management of the patent regulations. This answers two major objectives:
• T he speed in which a decision is made, which contributes to customer satisfaction – both in terms of the agent and online.
• T he quality of decision-making runs through the expertsystems of Buy Way, which were adapted to our ownpatent regulations.
The sales tool offers additional advantages:
• Personalisation of the tool according to our partners’ wishes.
• Simplifying the input of customer data.
• Fast decision and validation of the files.
• Personal follow-up of the partner: online statement of financing, chat, Buy Way Academy, etc.
• Availability of online services.
> 18
In 2012 Makro launched its e-shop, «makroshop.be». It now offers card-carrying customers the possibility to buy nonfood products online. E-shops enable chains to reduce the distance between customers and points of sale, and to increase the convenience of purchasing for the customer. Jointly with Makro, Buy Way has developed a solution that also enables payment for online purchases with the M-Card, the chain’s private label card. The customer can therefore also enjoy online benefits offered to card holders. Today, Makro clients can use their card in-store, at petrol stations, in restaurants and at drive-ins. They have the option to get cashback at the checkout and to pay for purchases online. In 2013 they will also have the possibility to activate their card and to request financing.
BUY WAY personal finance > Annual Report 2012
Prepaid cards In August 2012, Buy Way launched the Buy Way Prepaid card within the network of Alvadis stores. The card is a MasterCard and offers all the user options featured with this card. Buy Way is the first Belgian financial company to take this step. Providing a prepaid card goes beyond the traditional environment of banking agents and post offices. The packaging was therefore also designed especially for the Alvadis distribution channels (Press Shop, Relay, etc.).
• Physical or virtual card
• Available in selected stores or at one of the points of sale
• Secure online payments
buyway-prepaid.be
« Constructive innovation is to question oneself without losing sight of the needs of the end customer. From this perspective, we have reinvented our tools. » Lionel Blart Head of ICT
> 19
8 BUSINESS PROCESS oUTSOURCING OFFER Reinforced by double legitimacy: as lender and market leader, and a service provider for third parties, Buy Way offers a complete range of services that meets the needs of companies in the consumer credit sector.
A complete and specialised offer Our BPO offer consists of effective systems and a great understanding of the consumer credit sector, built over more than 25 years of experience. Our offer meets all the professional expectations, with a strong specialisation in financing at the point of sale.
SICLID
Systems & Tools
• Sales • Credit Management • Scoring and Expert systems
SAD
Client Management & loyalty
• Cross selling • After-sales services • Debt collection • Litigation
Reporting Project Management IT Operations
Three technical pillars contribute to this professional expertise: SICLID: system integrated with the credit life cycle. PHENIX: t he front office ensures links to thelatest technological support systems. SAD: system to support decisions-making and business intelligence. References: Fortis Credit Card: until 2008 Fimaser (Carrefour Bank): since 1988 KBC CF: since 2000
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PHENIX
Origination
• Retail • Internet • Automotive dealers
BUY WAY personal finance > Annual Report 2012
A system integrated into the activity At the centre, we find the system to support decisionmaking tools (SAD – Système d’Aide à la Décision). Their output branches out over the rest of the tools. These applications are the essence of this profession.
Phenix, the most visible component of the set-up, is the access point to the IT system for the salesperson in the store and for the customers throughout the entire life of the file.
Siclid, the integrated management system, coordinates the entire life cycle of a credit file: from the salesperson at the point of sale to the collection (for a very limited number of files).
Mobile banking
After-sales in POS
AFTER-SALES
Cards use
e-commerce credit
Card management
POS credit
Retailer management
SMS campaign
transactions management
Client accounting COLLECTION
Marketing segmentation Collection
Granting scoring
DISTRIBUTION Retailer scoring
Retailer relationship
Client payments
Credit life cycle
Marketing campaign
Client management
Homebanking
Billing / e-billing
Internal After-sales
DIRECT
Cracking online
IVR Phone Express
Call center
Credit increase POS
Client behavior scoring
Collection scoring
Data warehousing Legal reporting
LITIGATION Litigation
Debts selling
Operational reporting
Front tools for Clients / Partners / Internal
Type of application :
PHENIX
Data study and analysis
SICLID
Company accounting
SAD
Activity Reporting
Third party
Outsourcing
Management tools (internal)
Buy Way Group System Architecture - January 2013
A range of services that cover the entire value chain of consumer credit.
« We’ve been serving the big brands in the banking world and retail for 20 years. » Timothée Pourbaix Deputy Head of IT
> 21
9 COMPLIANCE The monitoring processes and procedures not only guarantee the quality of our customer services. They also support the proper functioning of a very complex and effective company such as Buy Way. Our company has three control bodies, each fulfilling a specific role within their well-defined domain.
Compliance Compliance is an independent, impartial and objective function. Its role and its competency domains, as well as its principles, are set down in the Charter of Compliance. Compliance > Fighting both money laundering and financing of terrorism > Integrity in our relationship with our customers in all our activities >D ata protection and professional confidentiality > Preventing conflicts of interest > Independence of the auditors >W histle-blowing >A ny other domain assigned by the Management Committee or the Board of Directors.
Internal audit The internal audit is an independent and objective activity, whose purpose is to assure Buy Way that its risks are monitored. The audit mainly safeguards the company’s effective character and the concrete application of the internal controls, and if necessary, by formulating recommendations aimed at improving effectiveness. In addition, the audit focuses on continuous improvement of operations in all the company’s entities. An Audit Charter defines the objectives, tasks, responsibilities and operating modes of an internal audit and therefore determines the fundamental principles of an internal audit. The strategy, level and operating rules of an internal audit are determined by the Management Committee within a framework approved by the Committee for Audit, Risks and Compliance.
External audit Auditing the company’s financial situation and that of its annual accounts is entrusted to an auditor who is proposed by the Board of Directors and appointed for a period of maximum three years by the General Meeting of Shareholders. The legal audit of the accounts of Buy Way is carried out by Mazars Réviseurs d’Entreprises SCRL, a company represented by Mr Dirk STRAGIER.
The tasks >T o analyse legislative and regulatory developments in order to anticipate and evaluate possible consequences for the activities in collaboration with the legal department. >T o identify, analyse and measure the risks of non-compliance and risk to reputation that might result from present and future activities and financial products, or from any change in the company’s area of activity. >T o offer support as part of development and implementation of compliance procedures and other documents. >T o ensure that obligations relating to compliance are respected, in particular taking into account any potential risks. >T o update the financial regulators or any other competent authority with regard to any suspicious incidents or transactions, to the extent required by local regulations. > To be the first port of call for regulators.
> 22
« Following profound changes in legislation and regulations, we ensure that the company complies with the new obligations. » Thierry Genard Head of Compliance & Indebtedness
BUY WAY personal finance > Annual Report 2012
RISK MANAGEMENT Buy Way is a responsible and committed player in the consumer credit market. This is why we have enhanced the vigilance with respect to over-indebtedness and the in-depth analysis of the client’s situation. These tools constitute the expertise that enables us to direct our activities more effectively. This increases customer satisfaction, and prevents us from spending too much time and effort on claims or collections. The 2011 Cost of Risk for Buy Way in IFRS norms was €6.1m. considering a portfolio of claims spent in losses. Without taking into account this sale, the cost of the risk amounts to €6.1m. and shows a constant decline compared to previous years: > 15% decline compared to 2011. > 34% decline compared to 2010. > 52% decline compared to 2009.
Risk is under control and it amounts to 1.5% in relation to the outstanding debt.
Our excellent level of risk management has contributed to the growth of the company’s profits. This is reflected by Buy Way’s specific and long-standing expertise. Over-indebtedness and money laundering constitute the greatest risks for Buy Way. Our fight against over-indebtedness also represents a commitment by the company to stand apart from its European competitors by demonstrating – based on solid figures – that we grant credit in a responsible manner. In fact, Buy Way has one of the lowest levels of Cost of Risk in this sector in Europe.
The reduction of risk costs is the result of: > Improved and redesigned systems for scoring, granting credit and collection > A clear decline in unpaid sums. > An increasingly effective chain of collection.
Risk* burden in % of the outstanding debt 3.00 %
- 40 %
2.50 % 2.00 % 1.50 % 1.00 %
2.8 %
3.2 %
2.5 %
1.9 %
1.6 %
1.5 %
2007
2008
2009
2010
2011
2012
0.50 % 0 %
Cost of Risk* in millions of euros (IFRS norms) 15
- 52 %
10
5
0
(*)
11.2
15.6
12.8
9.2
7.2
6.1
2007
2008
2009
2010
2011
2012
« Our risk management policy is a top priority for our company. The constant optimisation of our tools and the expertise of our employees result in ethical, responsible and respectful credit. » Jérôme Vallée Head of Risk
Without taking into account a portfolio of losses for 2.2 million euros in 2012.
> 23
Values Skills Our staff has been trained to respond to every question related to credit in an environment which is constantly changing.
2 Solidarity Buy Way works actively at improving the cohesion between its departments; our aim is to grow together in the same direction.
3 Service •O ur advisory teams serve our end customers with a 95% rate of response to incoming calls. • Our advisors at partner points of sale are entirely devoted to clients and to our preferential partners.
4 Reliability Thanks to its ICT teams, Buy Way Personal Finance can provide its partners with highly effective and continuously updated tools to grant financing.
5 Trust We communicate the information needed to manage credit in a transparent way (through detailed monthly statements, home banking, email, SMS, voice mail server, etc.).
« Diversity is a trump in our company. Nurturing diversity means that everyone is treated equally, regardless of their differences. » Chantal Brabander Head of Administration > 24
BUY WAY personal finance > Annual Report 2012
Sustainable development As a responsible company, Buy Way does not shy away from sustainable projects. These commitments are an integral part of the company’s development. Four areas are prioritised.
Participatory management Buy Way tests participatory management by sharing its unique corporate vision. Buy Way is extremely devoted to this internal project that aims to define – jointly with all its employees – the future of the company and to develop it accordingly. This process entails a mutual and individual effort: we are committed to one another and we have the opportunity to take on challenges. In 2012 Buy Way employees shared their visions in 11 challenges, in which they encountered new materials, which included the new brand and graphic logo. This process of shared vision places the shareholders, managers and staff in one playing field. This is one way to experience the power of unity.
2 Reducing the risks of over-
indebtedness and combating money laundering
The expertise of a company such as Buy Way, which specialises in providing credit, lies in its ability to extend loans wisely to its clients by evaluating their ability to repay them. Our rate of risk is the lowest on the market. In this sector it is essential for both borrower and lender to act responsibly towards one another. Various lines of action: >T owards the client: • Long-established expertise in evaluating the risks of overindebtedness •S ystematically consulting the files in the Central Credit Register of the National Bank of Belgium > Internally: • Monthly risk evaluation • The objectives of the employees are aligned with the objectives of risk management • Respect for the in-house code of ethics • Financial vigilance >
Respect for external standards: • Federal Public Service (SPF) - Economy • National Bank of Belgium • Professional Union of Credit Providers (UPC)
> Code of Ethics and Code of Conduct: • Formulating Buy Way’s own Code of Ethics • Subscribing to the UPC Code of Conduct.
and respecting 3 Promoting non-discrimination at work Diversity is a trump in our company. On 15 December 2011 Buy Way signed the Brussels Capital Region Diversity Charter for Companies. Promoting diversity means that everyone is treated equally. We would like to see the crystallisation of the diversity policy within our company. We have committed ourselves to formulating and implementing a diversity plan. With the emphasis on recruitment, training and human resource management, Buy Way will publish its commitments to actions and the results. This will be at the company level and that of the competent authorities.
4 Quality of service to Consumers Every year, with the help of an external and independent company, we assess the way we honour our commitments both towards our B2B partners and the end customers. The company undertakes to communicate and ensure respect for the ten commitments made to the customer: transparency, the right price, customer-oriented services, confidentiality, customer satisfaction, management of the credit cycle, data collection, credit risk management, risk prevention and debt management. On this last point, Buy Way makes it its basic principle to collect claims while listening closely to the customer. We have several types of solutions suited to different problems that we encounter. The objective is to deal with the outstanding loan as a whole, not just the unpaid sum.
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3 FINANCIAL REPORTS OF buy way personal finance CONSOLIDATED FIGURES Balance sheet ASSETS IFRS (€)
Notes
2012
2011
2010
12,770,141
14,229,567
27,438,885
359,448,633
396,949,057
440,558,743
Financial fixed assets
44,080
81,495
2,471,495
Tangible fixed assets
257,671
370,361
363,864
19,747,264
20,000,791
20,571,453
17,949,682
24,109,750
12,271,834
410,217,471
455,741,021
503,676,275
2012
2011
2010
Equity
108,434,252
111,471,802
76,854,710
Financial debts
294,391,000
336,072,000
418,172,000
Other payables
7,392,219
8,197,218
8,649,565
410,217,471
455,741,021
503,676,275
Investments (1)
Trade receivables
(2)
Intangible fixed assets Other receivables
LIABILITIES IFRS (€)
Notes
(1) The portfolio of loans is accounted according to the method of effective interest rates (IAS 39). (2) Goodwill reported during the merger between Fidexis SA and BNP Paribas Personal Finance Belgium.
Off-balance sheet Buy Way Personal Finance had on 31.12.2012 at its disposal a confirmed credit of 350€M. granted by BNP Paribas Fortis, which guarantees our refinancing for the coming years. Buy Way will launch in 2013 a securitization program with an amount of 250 €M.
2012: A solid result in difficult circumstances, « which confirms the pertinence of our business model. » Hugues Lucet CFO > 26
BUY WAY personal finance > Annual Report 2012
Profit & Loss Account Profit & Loss Account (IFRS in €m.)
2012
2011
2010
Interest income
37.5
38.4
41.4
Interest expenses
-8.0
-10.5
-11.8
Financial margin
29.5
27.9
29.5
Insurances and other revenue
21.5
19.1
11.9
Deductions and commissions
-4.3
-4.0
-3.4
Net banking income
46.7
43.0
38.0
General expenses
-26.1
-25.1
-23.4
Gross operating profit
20.6
17.9
14.7
Cost of risk*
-4.0
-7.2
-9.2
Net profit before taxes
16.7
10.8
5.4
(*)
Cost of the risk including the sale of a portfolio of 2,2 €M. losses in 2012.
Profit & Loss Account (IFRS in % of outstanding debt)
2012
2011
2010
Interest income
9.0 %
8.3 %
8.5 %
Interest expenses
-1.9 %
-2.3 %
-2.4 %
Financial margin
7.0 %
6.1 %
6.1 %
Insurances and other revenue
5.1 %
4.1 %
2.5 %
Deductions and commissions
-1.0 %
-0.9 %
-0.7 %
Net banking income
11.2 %
9.3 %
7.8 %
General expenses
-6.2 %
-5.4 %
-4.8 %
4.9 %
3.9 %
3.0 %
Cost of risk
-0.9 %
-1.6 %
-1.9 %
Net profit before taxes
4.0 %
2.3 %
1.1 %
Other financial ratios
2012
2011
2010
General expenses / Net banking income
56 %
58 %
61 %
8 %
17 %
24 %
Gross operating profit
Risk / Net banking income
The accounts presented here are an abridged version of the statutory annual accounts prepared in accordance with the applicable regulations in Belgium. The auditor, Mazars Réviseurs d’Entreprises SCRL, represented by Dirk Stragier, has certified the annual accounts of Buy Way Personal Finance unreservedly and they were approved during the General Meeting of Shareholders on 14 May 2013.
> 27
3 FINANCIAL REPORTS OF buy way pErsonal finance CONSOLIDATED FIGURES (CONT’D) Noteworthy events during the financial year > Sale of a portfolio with losses of a nominal value of €10m. > Revision of the coefficients for provision due to the portfolio sale with losses.
Activity During the financial year 2012, the credit income increased to €357m, an increase of 7% compared to 2011. 53,865 new credit card accounts were opened in 2012, i.e. an increase of 3.7% compared to 2011. The outstanding debt on cards as of 31/12/2012 came to €401m compared to €439.8m in 2011 – a decrease that illustrates Buy Way’s strategic orientations.
2012 results Buy Way’s operating profit reached €16.7m in 2012, a 55% increase compared to 2011. These results are in line with the 2011 results: > A 9% increase of net banking income > A 4% increase in general expenses > A 14% decrease of the cost of risk within a comparable perimeter, without taking into account the portfolio sale with losses. In 2012 Buy Way improved both its operating coefficient (56%) and its risk/net banking income ratio (13%)*, and increased its solvency ratio to 22%.
Adjusted for the portfolio with losses.
*
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Address
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Websites
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