Aeon Financial Service Co., Ltd. · TSE:8570
Aeon Financial Service — Q3 FY2020 Earnings Presentation
26 slides from Aeon Financial Service's earnings presentation, Oct 19, 2020
Slide 1: Results for the Third Quarter of FY2020 - Scripts and QAs
Results for the Third Quarter of FY2020 Scripts and QAs Scripts P.1 Today, while you are busy, thank you very much for participating in our third quarter 2021 financial results telephone briefing. I'm Suzuki, who is in charge of corporate planning. Today, I would like to explain the summary of the t
Slide 2: Key points of the announcement
P.2 First of all, I would like to explain the key points of today's announcement. Consolidated financial results for this quarter, increased revenue and decreased profit. Consolidated financial results for this quarter were at the same level as the three months of the previous year due to a recovery
Slide 3: Table of contents
P.3 Today, I will explain according to the table of the contents.
Slide 4: Consolidated results by segment
P.4 Consolidated results by segment. In the domestic business, while card shopping revenue and cashing revenue decreased, aeon Allianz Life Insurance Co., Ltd., which has become a consolidated subsidiary for the current fiscal year, was affected by the fact that it was taken into the profit and loss
Slide 5: Business performance excluding impact of insurance company consolidation
P.5 Business performance excluding the impact of consolidation of insurance companies As shown in the chart on the top right, the impact on domestic business associated with the consolidation of insurance companies is based on both operating revenue and operating expenses, and there is little impact
Slide 6: Quarterly performance trends in Domestic and Global business
P.6 Quarterly Performance trends in Domestic and Global business In Global business, we recorded a large increase in bad debt allowance in the first quarter, which decreased from the second quarter onwards, and you can see that operating profit has started to increase.
Slide 7: Factors contributing to increase or decrease in profit by area
P.7 Factors contributing to increase or decrease in profit by area. Main factors contributing to the increase or decrease in operating profit. As you can see, in both business Domestic and Global, a decrease in operating revenue was main factor. Details of the decrease in expenses are as you can see
Slide 8: Consolidated balance sheet
P.8 Consolidated balance sheet. In the third quarter, operating loans decreased in Japan and overseas due to a decrease in the volume of cash advances and personal loans. On the other hand, loans in the banking industry increased by ¥304.3 billion due to strong housing loans transactions in Japan. I
Slide 9: Consolidated results by area
P.9 Consolidated results by area. In both domestic and global businesses, the year-on-year rate of change in transaction volumes of various products and the increase or decrease in the amount outstanding of finance receivables decreased across the line due to corona effects such as restrictions on b
Slide 10: Domestic Card Shopping Volume Trends
P.10 Domestic Card Shopping Volume Trends. This graph shows the increase or decrease in credit card shopping and cash advances transaction volumes compared to the same month of the previous year. As for credit card shopping, the self-restraint of going out was relaxed in June, and the transaction vo
Slide 11: Domestic Card Shopping Volume Trends
P.11 Domestic Card Shopping Volume Trends. In addition to life-related industries such as food supermarkets and drug stores, such as the AEON Group, mail-order sales, home appliances, and furniture have been booming due to the tailwind of nesting consumption. On the other hand, with regard to consum
Slide 12: Trends in various transactions and outstanding receivables (Domestic)
P.12 Trends in various transactions and outstanding receivables (Domestic). In credit card shopping and cash advances, the pace of decline in the amount outstanding of receivables has slowed as transaction volumes have been on a recovery trend. In installment finance, transaction volumes remained un
Slide 13: Trends in various transactions and outstanding receivables (Global)
P.13 Trends in various transactions and outstanding receivables (Global). Products linked to goods sales such as credit card shopping and installment finance have seen a recovery in business activity and a recovery in transaction volumes and receivables outstanding. As the company reviewed its tempo
Slide 14: Trends in finance receivables (Global)
P.14 Trends in finance receivables (Global) In the China Area, Hong Kong where the economic environment continues to deteriorate from the previous fiscal year, has been implementing stricter screening and reserves for bad debts based on future projections, so the contents of receivables have been im
Slide 15: Main initiatives for the current fiscal year
P.15 Main initiatives for the current fiscal year are as follows.
Slide 16: Effects of the COVID-19
P.16-17 Effects of the COVID-19. Here is a list of the situation in countries with a large corona impact. In the third quarter, some regions in each country had an early convergence of impacts on repayment grace measures at the request of authorities and voluntary responses. the other hand, some reg
Slide 17: Main initiatives - Domestic
P.18 In the domestic business, we have secured social distance at bank’s branches, insurance counters, and card recruitment counters, as well as expanded our online reservation system and TV consultation and procedure counters that enable customers to make reservations in advance in response to the
Slide 18: Main initiatives - Global
P.19 Main initiatives – Global. In Thailand, the Big C Group, a leading local retail group that has been issuing partner cards, and a new platinum card for customers with a high monthly income of 30,000 THB or more have been issued since July. Discounts on the retail group's e-commerce sites are als
Slide 19: Online measures in global business
P.20 In addition, in the global business, there is a growing need for indirect and no contact operations in the event of a novel coronavirus infection, so we are accelerating online measures. As you can see, in 10 overseas countries and regions, transactions with customers, mainly credit cards, pers
Slide 20: Credit screening and work-related initiatives
P.21 The following are the credit screening and work-related initiatives. In Japan, we introduced identity verification (eKYC) when applying for AEON Bank cash card and CASH +DEBIT card on October. As a result, in addition to security improvements such as prevention of impersonation by third parties
Slide 21: Revision of earnings forecast
P.22 Finally, we announced revision of earnings forecast today. Full-year consolidated earnings forecasts will be explained on the next slide.
Slide 22: Operating profit versus previous forecast
P.23 As shown in the graph on the left side of the page, consolidated operating profit for the third quarter was higher than the previous forecast in gray. The deviation between the original assumption and actual results is as described on the right side of the page. The company's efforts to digitiz
Slide 23: Revised earnings forecast figures
P.24 The revised earnings forecast figures are as shown in the chart. The revised consolidated earnings forecasts are still disclosed in a range format due to uncertainty over the outlook for financial results due to the effects of the third wave of the spread of infectious diseases at the time. The
Slide 24: QAs
QAs ■Mr. Watanabe, analyst at Daiwa Securities Q: Ordinary profit for earnings forecasts in the range announced. Please tell us about the assumptions of the upper and lower limits. Is the uncertainty of fluctuations in topline, promotional and credit costs involved? A: Basically, it is at the top li
Slide 25: QAs (continued)
occurred in Thailand and Malaysia, and the situation in corona has deteriorated, such as the declaration of a state of emergency. There is a possibility that the situation of the balance will be the same as in Japan in the future. We don't know what will happen, so conservative earnings forecast is
Slide 26: QAs (continued)
year. Q: Will the schedule and content of the next medium-term management plan change significantly in the future due to the impact of the third wave of the new coronavirus? A: In the circumstances of coronal disaster, we have been assembling a medium-term management plan for a year. While the impac
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