Aeon Financial Service Co., Ltd. · TSE:8570
Aeon Financial Service — Q3 FY2022 Earnings Presentation
34 slides from Aeon Financial Service's earnings presentation, Jan 12, 2023
Slide 1: FY2022 Third Quarter IR Presentation Material
This is an abridged translation of the original Japanese document and is provided for informational purposes only. If there are any discrepancies between this and the original, the original Japanese document prevails. FY2022 Third Quarter IR Presentation Material January 12, 2023 Stock Listing: Toky
Slide 2: Contents
Contents 1. Financial Highlights 2. Overview of Domestic Business 3. Overview of Global Business 4. Future Directions 5. Earnings and Dividend Forecasts 6. APPENDIX AEON Financial Service Co., Ltd. 1
Slide 3: Highlights of the Consolidated Results
1. Financial Highlights The Highlights of the Consolidated Results ・Progress against full-year forecasts is roughly on plan Consolidated Domestic Global Operating (compared to (compared to (compared to revenue ( (YoY) )the 3Q of (YoY) the 3Q of (YoY) the 3Q of FY2019 ) FY2019 ) FY2019 ) ¥331.1bn （95
Slide 4: Highlights of the Consolidated Results - 3Q 3 Months
1. Financial Highlights The Highlights of the Consolidated Results -3Q 3 Months ・Domestic : The recovery of credit card receivables was lower than planned, and operating profit was negative ・Global : Performed well with operating revenue and net income exceeding the previous year's level Consolidate
Slide 5: Breakdown of Operating Profit YoY (Cumulative 3Q)
２. Overview of Domestic Business Breakdown of Operating Profit YoY (Cumulative 3Q) ・Credit card business covers negative cash advances due to recovery in shopping Contents YoY Change（Unit : billions of yen) ■Card Shopping Recovery Shopping Revenue +7.6 - Transaction volume : 109%(YoY) / Revolving ba
Slide 6: Renewal of Card Design and Membership Acquisition Measures
２. Overview of Domestic Business Renewal of Card Design and Membership Acquisition Measures ・In conjunction with the renewal of AEON Card tickets, we will conduct a winter enrollment campaign at stores and on the Web. Gained approx. 200,000 new members in November New Card Design Monthly Trends in t
Slide 7: Cash Advance Measures
２. Overview of Domestic Business Cash Advance Measures ・Measures tailored to member attributes have led to an increase in cash advance transaction volume Year-over-year change in cash advance transactions "Revitalization of existing and 120% 115% dormant members" Appeal for online cash advances by D
Slide 8: Credit Card Transactions Volume and Outstanding Receivables
２. Overview of Domestic Business Credit Card Transactions Volume and Outstanding Receivables ・Strengthened sales promotion to increase household spending and stimulate consumption, and re-expanding the amount outstanding of revolving after bottoming out at the end of the previous fiscal year Shoppin
Slide 9: Asset Management Business (AEON Bank)
3. Overview of Global Business Asset Management Business (AEON Bank) ・Establishing a sales process for asset management products that leverages AEON Bank’s strengths in customer service at branches Financial instrument sales channels Financial instruments transaction volume (YoY) （Financial products
Slide 10: Cumulative Performance Progress in Q3 (China Area, Hong Kong)
3. Overview of Global Business Cumulative Performance Progress in the Q3 (China Area, Status in Hong Kong) ・Operating revenue steadily expanded, and the bad debt ratio stabilized at a low level, resulting in profit expanding year-on-year (Unit : thousands of HKD) Operating Revenue and Profit Before
Slide 11: Cumulative Performance Progress in Q3 (Mekong Area, Thailand)
3. Overview of Global Business Cumulative Performance Progress in the Q3 (Mekong Area, Status in Thailand) ・Earnings increased due to steady expansion of outstanding operating receivables, and bad debt control remained stable (Unit : thousands of THB) Operating Revenue and Profit Before Income Taxes
Slide 12: Cumulative Performance Progress in Q3 (Malay Area, Malaysia)
3. Overview of Global Business Cumulative Performance Progress in the Q3 (Malay Area, Status in Malaysia) ・Operating revenue expands due to increased transaction volume, but controlling bad debt costs is an issue (Unit : thousands of MYR) Operating Revenue and Profit Before Income （Unit : thousands
Slide 13: Outstanding receivables and NPL ratio
3. Overview of Global Business Outstanding receivables and NPL ratio ・NPL ratio rises due to expansion of operating receivables in the Mekong Area, but controlled in the normal range in each area China Mekong Malay （Unit : billions of yen) 5.0% Area 100 8.0% Area 400 8.0% Area 400 4.0% 80 6.0% 300 6
Slide 14: Future Directions
業績ハイライト・概要 第3四半期以降の取り組み Future Directions AEON Financial Service Co., Ltd.
Slide 15: Domestic Business - Expanding the No. of IDs
4. Future Directions Domestic Business – Expanding the No. of IDs ・Promote the use of AEON Pay and expand the merchant network to expand the number of IDs and penetration Measures to promote the use of AEON Pay Expansion of AEON Pay merchant network Food, Continue to implement campaigns using points
Slide 16: Domestic Business Restructuring
4. Future Directions Domestic Business Restructuring ・In the 1H of FY2023, the company shifted to a business holding company whose parent company is the settlement business, and continued to reorganize its domestic business Expected Restructuring Effects Future Perspective Restructuring Effects Opti
Slide 17: Expansion of Select Club Benefits
4. Future Directions Review of housing loans rates and measures ・Strengthen measures to pursue synergies between retail and finance, such as expanding exclusive benefits for Select Club subscribers Main measures for housing loans Expansion of AEON Select Club benefits (from March '23) Expansion of S
Slide 18: Global Business (China Area)
4. Future Directions Global Business (China Area) ・Implement plans in line with the recovery in demand for tourism to Japan and strengthen the insurance business to acquire new revenue sources Capturing demand for tourism to Japan Started consulting business for savings-type insurance products ・Sinc
Slide 19: Global Business (Mekong Area)
4. Future Directions Global Business (Mekong Area) ・Transaction volume growth in Cambodia toward the second half of the year, strengthening receivables management system in Thailand to improve bad debt costs Growth in transaction volume (Cambodia) Measures to Improve Bad Debts (Thailand) ・With the r
Slide 20: Global Business (Malay Area)
4. Future Directions Global Business (Malay Area) ・Capture growing demand for electric motorcycles in Indonesia, aim to improve its credit content in Malaysia Started handling electric motorcycles Measures for the current FY (Indonesia) against bad debts (Malaysia) ・Started handling electric motorcy
Slide 21: FY2022 earnings forecast, dividend forecast (unchanged)
5. Earnings and Dividend Forecasts FY2022 earnings forecast, dividend forecast (unchanged) ・In view of uncertainties in the economic environment, such as interest rates and price rises, there is no change in earnings forecasts Consolidated Domestic Global Operating revenue(※1) (YoY) (YoY) (YoY) ¥445
Slide 22: APPENDIX
業績ハイライト・概要 第3四半期以降の取り組み APPENDIX AEON Financial Service Co., Ltd.
Slide 23: ESG Initiatives (Issuance of sustainability-linked loans)
６. APPENDIX ESG Initiatives （Issuance of sustainability-linked loans ・In November 2022, the Group's first sustainability-linked loan was raised at a local subsidiary in HK Planning to actively use it in future fundraising as a measure that matches the Group's environmental and social contribution me
Slide 24: Impact of the application of the accounting standard on revenue recognition
6. APPENDIX Impact of the application of the accounting standard on revenue recognition ・Began applying the accounting standards for revenue recognition in the FY2022 1Q ・Due to the application of the standards, some operating revenues and operating expenses have been changed from gross notation to
Slide 25: Impact of the application of the accounting standard on revenue recognition
６. APPENDIX Impact of the application of the accounting standard on revenue recognition ・Cumulative results for 3Q of FY2022 showed an impact of ¥25.1 bn in domestic card shopping revenue and ¥1.6 bn in domestic e-money revenue ・Advertising expenses decreased by the same amount, and there was no imp
Slide 26: Q3 Results by Segment
6. APPENDIX Q3 Results by Segment （Unit：billions of yen） Domestic Global Consol. Total Solutions Total Total ※2 Retail ※3 ※2 China Mekong Malay ※3 Area Area Area ※4 Operating 206.3 122.3 128.9 125.1 16.3 64.1 44.6 331.1 Revenue YoY※1 95％ 76％ 99％ 121％ 143％ 118％ 118％ 103％ Change※1 -12.6 -37.6 -1.4 ＋21
Slide 27: Transaction volume and outstanding receivables of Global business
Transaction volume and the status of outstanding receivables of Global business ・Strengthen sales promotion measures and continue to expand transaction volume and operating receivables balance in each area China Area Mekong Area Malay Area Global Business （Hong Kong） （Thailand） Comparison Comparison
Slide 28: Q3 Results by Area
6. APPENDIX Q3 Results by Area (Unit : billions of yen) Balance of Increase or Transaction FY2021 Q3 FY2019 Q3 receivables decrease at Change in the volume Compared to Compared to (Before (※) the beginning previous quarter same period same period securitization) from the FY Credit card 5,062.1 109%
Slide 29: Cardholders Results
6. APPENDIX Cardholders Consolidated Diff from Domestic Diff from Global Diff from beginning of beginning of beginning of the FY the FY the FY Results (unit：million copies) 48.10 +0.79 30.52 +0.43 17.59 +0.36 【Domestic】 ・1.36 million new card members (YoY +0.17 million cards ) ・18.20 million cards w
Slide 30: FY2022 3Q Global Business Performance (Local currency)
６. APPENDIX FY2022 3Q Global Business Performance (Local currency) FY2021 3Q FY2022 3Q Results YoY Results YoY AEON Revenue 770,280 92% 887,361 115% CREDIT SERVICE Profit before tax 291,839 106% 299,664 103% (ASIA) (HKD’000) Profit for the period 243,256 106% 250,314 103% AEON Total Revenues 15,597,
Slide 31: FY2022 3Q Global Business Performance (Yen conversion)
6. APPENDIX FY2022 3Q Global Business Performance (Yen conversion) AEON Credit Service FY2021 3Q FY2022 3Q （Unit：billions of yen） (Asia) Co., Ltd. Results Results YoY Exchange rates: HKD 1 Operating income 10.9 15.1 138％ ・ FY2021 3Q ：¥14.22 ・ FY2022 3Q ：¥17.05 Operating profit 4.1 5.1 123％ Fiscal pe
Slide 32: Q3 Consolidated Balance Sheet
6. APPENDIX Q3 Consolidated Balance Sheet ■In the Q3 of FY2022, the balance of operating receivables, including operating loans, banking loans, and installment accounts receivable, increased by ¥488.6 bn. Provision for doubtful accounts increased by ¥5.1 bn 【Consolidated operating receivables balanc
Slide 33: Allowance for Doubtful Accounts and Loss on Refund of Interest
6. APPENDIX Full Year Allowance for Doubtful Accounts and Allowance for Loss on Refund of Interest Received by Segment （Unit：billions of yen） Domestic FY2021 Q3 FY2022 Q3 Retail Solutions Total Beginning of Allowance for doubtful accounts, period 5.7 6.4 balance at beginning of period 5.4 53.8 58.8
Slide 34: Forward-looking statements
Statements contained in this report with respect to the Company’s management strategies, business policies and results forecasts are forward- looking statements about the future performance of the Company, which are based on the assumptions and beliefs in light of the information currently available
AEON Financial Service — Q3 FY2022 Earnings Presentation on 6ix