Aeon Financial Service Co., Ltd. · TSE:8570
Aeon Financial Service — Q3 FY2024 Earnings Presentation
41 slides from Aeon Financial Service's earnings presentation, Jan 9, 2025
Slide 1: FY2024 3Q 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. FY2024 3Q IR Presentation Material January 9, 2025 Stock Listing: Tokyo Stock Exch
Slide 2: Financial summary
Financial summary Domestic and overseas sales receivables are steadily increasing Revenue and profits are continuing to increase. ※Excluding securitized receivables Business results are progressing favorably Consolidated operating revenue is increasing steadily (YoY 109%), and consolidated operating
Slide 3: The Highlights of the Consolidated Results
The Highlights of the Consolidated Results • All profits increased, despite the recording of compensation expenses (¥2.8 bn) for credit card fraud using special methods in extraordinary losses, due to the recovery of domestic operations FY202４ Rate of Consolidated YoY Forecast progress Domestic YoY
Slide 4: The Highlights of the Consolidated Results 3Q Accounting Period (3 months)
The Highlights of the Consolidated Results 3Q Accounting Period (3 months) Consolidated YoY Domestic YoY Global YoY Operating Revenue ¥132.9 bn １1２ ％ ¥７8.0 bn １１2 ％ ¥55.5 bn １１３ ％ Operating -％ Profit ¥１０.7 bn １８５ ％ ¥２.７ bn (+4.9) ¥7.８ bn 9８ ％ Ordinary profit ¥１１.８ bn ２０5 ％ － ー － ー Profit attributabl
Slide 5: Main factors: Domestic Breakdown of Operating Profit
[Domestic] Breakdown of Operating Profit • Due to steady growth in credit card revenue and the recording of financial revenue, operating revenue excluding the impact of APF increased by ¥23.5 bn • Although bad debt-related expenses increased, continued cost management resulted in a ¥12.8 bn increase
Slide 6: [Domestic] Building a foundation for stock income
Asset Profitability [Domestic] Building a foundation for stock income Improvement • The ratio of high-yield receivables to total domestic operating receivables improved, leading to an increase in asset profitability • The ratio also improved compared to the first half of the year (17.1%), and effort
Slide 7: [Domestic] Credit cards, E-money
Productivity [Domestic] Credit cards, E-money (Revenue growth) • Shopping transaction volume was up 10６% YoY, due to the popularity of Gold Appreciation Day and the promotion of AEON Pay • Cash advance transaction volume was up on the previous year (100.3% YoY) despite a decline in the market transa
Slide 8: [Domestic] Status of members
生産性 Productivity ［ Domestic］ Status of members (Revenue growth) （収益拡大） •Expand customer base while focusing on acquisition efficiency through acquisition channel and operational reviews •Total number of card members acquired was 1.19 million (YoY 96%), with growth in in-store acquisition No. of card
Slide 9: [Domestic] AEON Pay
Productivity [Domestic] AEON Pay (Revenue growth) •The no. of available locations is expected to reach the initial target of 2.9 million locations •By installing it in the group app, the aim is to make it more widely used as a payment function within the AEON Group No. of members and available locat
Slide 10: [Domestic] Status of acquisition of high-yield loans
Asset Profitability [Domestic] Status of acquisition of high-yield loans Improvement • The balance of receivables has been steadily increasing due to improvements in the app UI/UX and personalized approaches based on AI • The balance of revolving credit has been steadily increasing, and the target b
Slide 11: [Domestic] Cost Control
Productivity [Domestic] Cost Control (Cost control) • The ratio of bad debt-related expenses, excluding the impact of unauthorized use, has remained below 1%, and is stable • The cost per member has stabilized due to the review of investment from the second half of last year, and efficiency improvem
Slide 12: [Domestic] Housing Loan
Productivity [Domestic] Housing Loan (Revenue growth) • By continuing to promote unique benefits other than interest rates in collaboration with retailers, transaction volume was 108% YoY • Interest rates were revised in May and October for residential use and in September for investment use, and we
Slide 13: [Domestic] Bank Deposit
[Domestic] Bank Deposit ・Aiming to strengthen deposit acquisition through campaigns such as term deposit campaigns, increase of 109% YoY, increase of ¥352.8 bn from the beginning of the term •Offering preferential interest rates based on transaction status, both the no. of accounts in the higher sta
Slide 14: [Global] Performance Highlights by Segment
[Global] Performance Highlights by Segment • Operating revenue was the highest ever in all three areas Excluding the of the digital bank in the Malay region, profits increased • In the accounting period (3 months), profits in the Chinese Area turned around Interim period Global business China Area M
Slide 15: [Global] Environment by area
[Global] Environment by area • In Malaysia, economic growth has remained high, and private consumption has been strong • Meanwhile, in Hong Kong, domestic demand has continued to decline, and the number of personal bankruptcy filings has remained high, and in Thailand, GDP growth has also stagnated
Slide 16: [Global] China Area Performance Highlights
[Global] China Area Performance Highlights • Capturing consumer demand in the “Kitakami” area and other measures to respond to changes in the environment have been successful, and shopping transaction volume reached a record high in the third quarter • By strengthening credit screening and credit mo
Slide 17: [Global] Mekong Area Performance Highlights
[Global] Mekong Area Performance Highlights • Expansion of the member base and increase in transaction volume centered on credit card shopping • Operating revenue increased, but operating profit was almost the same as the previous year due to increases in personnel expenses and bad debt-related expe
Slide 18: [Global] Malay Area Performance Highlights
[Global] Malay Area Performance Highlights • In addition to the mainstay installment finance, the volume and balance of personal loans increased, and profits continued to grow by more than 20% • Bad debt-related expenses increased due to the impact of the reversal of the previous fiscal year and the
Slide 19: [Global] Expansion of business in the Malay Area
[Global] Expansion of business in the Malay Area • Increase the ratio of personal loan balances. Promote the construction of a credit portfolio that is resilient to changes in the economic environment • Contribute to revenue growth by improving customer convenience, such as through full online suppo
Slide 20: [Global] Balance of Receivables and NPL of Listed Subsidiaries
[Global] Balance of Receivables and NPL of Listed Subsidiaries ACSA: NPL ratio increased due to restructuring agreement, but bad debt expense ratio decreased AEONTS: Bad debt expenses decreased due to reversal of provisions from the 2Q floods, NPL ratio remained stable ACSM: NPL ratio remained stabl
Slide 21: Sustainability Initiatives
Sustainability Initiatives Promoting DE&I Improving external ESG evaluations Working to create a corporate environment where all employees can work in a way that is ACS Malaysia true to themselves and find fulfillment in their Winner of the “Sustainability & CSR Malaysia Hour work, and we are promot
Slide 22: Priority Measures
Priority Measures AEON Financial Service Co., Ltd. 22
Slide 23: Consolidation of the financial business of the AEON Group
[Review of business portfolio] Consolidation of the financial business of the AEON Group • Consolidate the e-money WAON value issuer business ※１ Leverage economies of scale to strengthen competitiveness • Integrate with AEON Pay to provide a seamless payment experience starting from your smartphone
Slide 24: Business expansion in Vietnam
[Review of business portfolio] Business expansion in Vietnam • On October 7, 2024, the group-wide loyalty program “WAON POINT” was launched in Vietnam • The acquisition of a finance company has further expanded the customer and merchant base, and is promoting the creation of an AEON Living Zone Deve
Slide 25: [Domestic] Reorganizing real touch points
Productivity [Domestic] Reorganizing real touch points • In collaboration with Monex Inc., respond to customer investment needs while reducing administrative operations • Strengthen insurance products, which have high face-to-face consultation needs, and further improve productivity by integrating b
Slide 26: [Domestic] Maximizing Group Synergy
Productivity [Domestic] Maximizing Group Synergy (profit growth) • In the Chugoku and Shikoku area, 110,000 new customers were acquired through the issuance of a new co-branded card with Fuji • In Hokkaido, the company is aiming to capture demand for payments at former Seiyu stores and acquire new m
Slide 27: [Global] Measures taken by various countries to improve productivity
[Global] Measures taken by various countries to improve productivity Productivity • As a measure to increase profits from the 4th quarter onwards, in addition to providing new products in each overseas area, Indonesia will work with new companies to advance credit operations using AI ■ China Area（AC
Slide 28: Earnings and Dividend Forecasts
Earnings and Dividend Forecasts AEON Financial Service Co., Ltd. 28
Slide 29: FY2024 earnings forecast, dividend forecast
FY2024 earnings forecast, dividend forecast （Unit ： JPY） Consolidated YoY Domestic YoY Global YoY Operating ５20.0 bn １０7 ％ 3１0.0 bn １０５ ％ 2１0.0 bn １０８ ％ Revenue Operating 55.0 bn 110 ％ 1５.0 bn １２９ ％ ４1.０ bn １０7 ％ Profit Ordinary Payout 55.0 bn 107 ％ Dividend per － ー share － ー Profit ratio Interim： ２
Slide 30: Our Purpose
［Our Purpose］ AEON Financial Service Co., Ltd. 30
Slide 31: Appendix
Appendix AEON Financial Service Co., Ltd. 31
Slide 32: Changes in the interest rate environment
Changes in the interest rate environment 【Repost】 • Domestic: Demonstrate the strength of funding, which is centered on bank deposits Global: Assume an improvement in interest margins due to a decrease in borrowing rates Domestic Global Interest Rate Outlook for continued interest Outlook for lower
Slide 33: Approach to ROE Improvement
Approach to ROE Improvement 【Repost】 ROE Return on Operating Existing Improve Assets Number of (%) Receivables high-yield bond ment valid IDs + × Operating Revenue / Outstanding Receivables New Products Utilization × +α rate × Fee Amount Productivity used for (%) Revenue each product Net Income / Op
Slide 34: Consolidated Balance Sheet
Consolidated Balance Sheet （Unit ： Bn JPY） FY 202４ FY 202４ 3Q Results YTD 3Q Results YTD Cash and deposits 533.7 ▲ 131.7 Deposits ４,８98.7 +360.4 Accounts Operating Loans 994.２ +75.4 payable-trade 415.7 +147.2 Loans and bills Interest-bearing discounted for 2,705.1 +365.9 debt 1,267.6 ▲ 45.4 banking
Slide 35: Results by Segment
Results by Segment （Unit ： Bn JPY） Domestic Global Consol. China Mekong Malay Retail Solutions Total ※1 Total ※1 Area Area Area Total ※１ Operating 226.4 144.9 137.6 164.0 26.0 71.5 66.4 388.7 Revenue YoY 106％ 1１4％ 99％ 114％ 117％ 106％ 124％ 109％ Operating 12.2 9.9 2.2 25.3 6.4 10.2 8.7 37.9 Profit YoY
Slide 36: Results by Area
Results by Area Transaction Operating (Unit ： Bn JPY） YoY receivables YTD volume (Before securitization) Credit card 5,848.0 106% １,909.2 +192.8 credit card shopping 5,561.1 106% 1,476.0 +171.9 Domestic （of which, revolving and installment) - - 352.6 ＋41.9 cash advance 286.8 1０0% 433.1 +20.8 Housing
Slide 37: Cumulative Results of Overseas Listed Companies (Local Currency)
Cumulative Results of Overseas Listed Companies (Local Currency) FY 2023 FY 2024 3Q Results 3Q Results YoY AEON Revenue 1,192,889 1,304,551 １09% CREDIT SERVICE Profit before tax 339,443 328,748 97% (ASIA) HK$’000 Profit for the period 282,263 275,307 98% AEON Revenue 16,540,572 1６,７４７,３０６ １０１% THANA
Slide 38: Cumulative Results of Overseas Listed Companies (Yen conversion)
Cumulative Results of Overseas Listed Companies （Yen conversion） FY 202３ FY 202４ (Unit ： Bn JPY） Exchange rates 3Q Results 3Q Results YoY Revenue 21.6 25.4 117% AEON （JPY / HKD） CREDIT Profit before tax 6.1 6.4 104% ・ FY202３Q3 ： ¥18.16 SERVICE ・ FY202４Q3 ： ¥19.49 (ASIA) Profit for the period 5.1 5.3
Slide 39: Transaction Volumes and Operating Receivables of Global Business
Transaction Volumes and Operating Receivables of Global Business China Area Mekong Area Malay Area Global Business (Hong Kong) (Thailand) (Unit ： Bn JPY） YoY YoY YoY YoY (Change) (Change) (Change) (Change) Transaction volume 197.0 1２１% 266.6 122% 57.5 129% 521.1 1２３% Credit card Operating Receivable
Slide 40: Allowance for Doubtful Accounts and Provision for Loss on Interest Repayment by Segments
Allowance for Doubtful Accounts and Provision for Loss on Interest Repayment by Segments [Allowance for Doubtful Accounts ] （Unit ： Bn JPY） Domestic Global Consol. China Mekong Malay Retail Solutions Total Total Area Area Area Total Opening balance of allowance for doubtful ５５.６ 3.０ 53.０ ６４.３ ４.７ ３５
Slide 41: 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 FY2024 Earnings Presentation on 6ix