Aeon Financial Service Co., Ltd. · TSE:8570
Aeon Financial Service — Q2 FY2022 Earnings Presentation
37 slides from Aeon Financial Service's earnings presentation, Oct 4, 2022
Slide 1: FY2022 Second 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 Second Quarter IR Presentation Material October 4, 2022 Stock Listing: Toky
Slide 2: Contents
Contents 1. Financial Highlights 2. Overview of Domestic Business 3. Overview of Global Business 4. Earnings and Dividend Forecasts 5. Future Directions 6. APPENDIX AEON Financial Service Co., Ltd. 1
Slide 3: Financial Highlights: Consolidated Results
1. Financial Highlights The highlights of the consolidated results ・Consolidated ordinary revenue Profit attributable to owners of parent set new record highs for the first half of the fiscal year Consolidated Domestic Global Operating (compared to (compared to (compared to revenue ( (YoY) )the 1Q o
Slide 4: Expansion of the no. of AEON Card members in Domestic businesses
２. Overview of Domestic Business Expansion of the no. of AEON Card members in Domestic businesses ・Established an online membership acquisition process, with strong 1H new members of 880,000 (Unit :ten thousand of ■Status of the no. of new members and the enrollment ratio by channel members) 100 96
Slide 5: Domestic credit card receivables
２. Overview of Domestic Business Domestic credit card receivables ・Shopping use recovers ahead of time as consumption revitalizes Outstanding balance of revolving expands again after bottoming out at the end of the previous FY Shopping transaction volumes, Cash advance transaction volumes, 1,800 rev
Slide 6: Breakdown of operating profit in the domestic business year-on-year
２. Overview of Domestic Business Breakdown of operating profit in the domestic business year-on-year ・Credit card business covers negative cash advances by improved credit card and bad debt-related expenses Contents YoY Change （Unit : billions of yen) Credit card revenue ■Card Shopping Recovery Incr
Slide 7: Capturing Consumption Demand (Thailand)
３. Overview of Global Business Capturing Consumption Demand (Thailand) ・Conducted joint sales promotion with leading local retail groups such as large supermarkets and major EC sites in response to the recovery in consumption Promotion with leading retail groups "Personal Loan" Completely Cardless i
Slide 8: Capturing Consumption Demand (Hong Kong)
３. Overview of Global Business Capturing Consumption Demand (Hong Kong) ・Total transaction volume is higher than in 2019 before the covid-19 pandemic Further expand transaction volume by cultivating new customer segments AEON Card WAKUWAKU issuance begins Changes in Transaction Volume ・Targeting peo
Slide 9: Capturing Consumption Demand (Malaysia)
３. Overview of Global Business Capturing Consumption Demand (Malaysia) ・ Promote installment finance of individual motorcycle items whose recovery has been delayed due to バイクメーカーや販売加盟店との販促 inventory shortages and the use of personal loans that expand demand for funds Motorcycle Market and ACS Malays
Slide 10: Transaction volume and outstanding receivables of Global business
３. Overview of Global Business Transaction volume and the status of outstanding receivables of Global business ・Strengthening sales promotion measures in major areas and expanding transaction volume ・Operating receivables balance exceeds the first half of 2019 before the covid-19 pandemic China Area
Slide 11: Outstanding receivables and NPL ratio of the global business
３. Overview of Global Business Outstanding receivables and NPL ratio of the global business ・The NPL ratio in China Area continues to improve. In Mekong and Malay Areas, the NPL ratio increased in the 1H of the year due to economic recovery China Mekong Malay Area 7.0% Area 400 Area 5.0% 80 7.0% 350
Slide 12: FY2022 earnings forecast, dividend forecast (unchanged)
4. 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) ¥44
Slide 13: 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 14: Restructuring of domestic businesses
5. Future Directions Restructuring of domestic businesses ・Shift to a system centered on the payment business in order to promote the consolidation of resources and the creation of customers ＜Business Restructuring Chart＞ Purpose of the restructuring AFS＋ACS Maximizing Group Synergies ⇒Maximizing th
Slide 15: Future Directions – Domestic business
5. Future Directions Future Directions– Domestic business ・Expand the no. of IDs and places to used, promote cross-selling, and accelerate the development of business infrastructure Key Initiatives in the 2H Target Initiatives Expanding the Further expansion of the no. of IDs AEON Card annual acquis
Slide 16: Expansion of the no. of IDs and member networks
5. Future Directions Expansion of the no. of IDs and member networks ・Strengthening collaboration inside and outside the AEON Group expands the no. of common IDs for the AEON Group and the network of member stores Strengthening recruitment of members Expansion of AEON Pay member network ・Aim to acqu
Slide 17: Promotion of use
5. Future Directions Promotion of use ・Strengthen sales promotion in response to the bipolarization of customer needs, against the backdrop of rising prices and the recovery in consumption from the covid-19 pandemic External environment Customer Initiatives Acceleration of Growing Implementing measu
Slide 18: Promote cross-selling
5. Future Directions Promote cross-selling ・Expand housing loans usage benefits, 5% discount at AEON stores at any time from contract time to full payment Using settlement as a hook, Expand benefits of AEON Select Club (from March 2023) promote cross-selling of products and services such as banks an
Slide 19: DX Initiatives – Operational Reform (Domestic business)
5. Future Directions DX Initiatives – Operational Reform (Domestic business) ・Promote OMO through the renewal of the system infrastructure, the strengthening of the organizational structure, and the education of human resources. Initiatives to strengthen the OMO Expansion of AEON Bank's "Online prom
Slide 20: Future Directions – Global business
5. Future Directions Future Directions– Global business ・Approaching new customer segments by promoting digital financial inclusion and expanding business domains and products Key Initiatives in each country initiatives Promoting Introduction of App enhancements Opening a Digital Bank digital financ
Slide 21: Global business – Digital Financial Inclusion – DX Promotion/e-KYC
5. Future Directions Future Directions– Global business–Digital Financial Inclusion – DX Promotion/e-KYC ・Incorporating financial functions into AEON's retail app in Malaysia ・Promote non-face-to-face applications through the introduction of e-KYC. Following the start of operations in Malaysia, it i
Slide 22: Global business – Expansion of business domains and new products
5. Future Directions – Global business – Expansion of business domains and development of new products ・Cultivating a new customer base by expanding the insurance business and introducing new services such as nanofinance and BNPL Thailand: Cross-selling by expanding Thailand: Acquisition of insuranc
Slide 23: Promotion of DX in Global Business
5. Future Directions Promotion of DX in Global Business ・In each country, through DX, the ratio of personnel expenses to operating revenue has improved significantly, mainly in Thailand and Malaysia Status of productivity improvement in Global Business Operating 営業収益 revenue Full-year Labor cost rat
Slide 24: Reposting: Earnings and Dividend Forecasts
【Reposting】 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)
Slide 25: 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 26: ESG Initiatives (TCFD Compliance, Strengthening Governance, External Evaluation)
5. APPENDIX ESG Initiatives (TCFD Compliance, Strengthening Governance, External Evaluation) Disclosures based on the Task Force on Initiatives to Strengthen Governance Climate-related Financial Disclosures (TCFD) ・For the purpose of monitoring conflict-of-interest transactions with the parent compa
Slide 27: DX Initiatives - Improvement of Administrative Operations (Domestic business)
６. APPENDIX DX Initiatives - Improvement of Administrative Operations (Domestic business) ・On September 1, 2022, ACS Credit Management became the first debt collection company to obtain certification as a "DX Certified Business Operator" as defined by the METI ・Provide a new solution to improve debt
Slide 28: Impact of the application of the accounting standard on revenue recognition
5. 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 29: Impact of the application of the accounting standard on revenue recognition
5. APPENDIX Impact of the application of the accounting standard on revenue recognition ・In the FY2022 2Q, domestic revenue from credit card business of ¥16.2 bn and domestic e-money revenues of ¥1.1 bn were affected ・Advertising expenses also decreased by the same amount, and there was no impact on
Slide 30: 2Q Results by Segment
5. APPENDIX 2Q Results by Segment （Unit：billions of yen） Domestic Global Consol. Total Solutions Total Total ※1 Retail ※2 ※1 China Mekong Malay ※2 Area Area Area ※3 Operating 141.1 85.7 85.6 80.6 10.5 41.2 28.9 221.5 Revenue YoY※4 84％ 77％ 98％ 116％ 139％ 112％ 115％ 93％ Change※4 △27.8 △25.4 △2.2 ＋11.1 ＋
Slide 31: 2Q Results by Area
5. APPENDIX 2Q Results by Area (unit : billions of yen) Balance of Increase or Transaction FY2021 2Q FY2019 2Q 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 3,341.3 108%
Slide 32: Cardholders Results
5. 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) 47.76 +0.44 30.32 +0.23 17.44 +0.21 【Domestic】 ・0.88 million new card members (YoY +0.09 million cards ) ・15.45 million cards w
Slide 33: FY2022 2Q Global Business Performance (Local currency)
5. APPENDIX FY2022 2Q Global Business Performance (Local currency) FY2021 1H FY2022 1H Results YoY Results YoY AEON CREDIT Revenue 511,570 89% 571,730 112% SERVICE (ASIA) Profit before tax 206,999 114% 211,111 102% (HK$’000) Profit for the period 172,340 113% 176,774 103% AEON Total Revenues 10,385,
Slide 34: FY2022 2Q Global Business Performance (Yen conversion)
5. APPENDIX FY2022 2Q Global Business Performance (Yen conversion) AEON Credit Service FY2021 1H FY2022 1H （Unit：billions of yen） (Asia) Co., Ltd. Results Results YoY Exchange rates: HKD 1 Operating income 7.2 9.4 131％ ・ FY2021 1H ：¥14.08 ・ FY2022 1H ：¥16.49 Operating profit 2.9 3.4 119％ Fiscal peri
Slide 35: 2Q Consolidated Balance Sheet
5. APPENDIX 2Q Consolidated Balance Sheet ■In the 1H of FY2022, the balance of operating receivables, including operating loans, banking loans, and installment accounts receivable, increased by ¥352.6 bn. Provision for doubtful accounts increased by ¥0.9 bn 【Consolidated operating receivables balanc
Slide 36: Allowance for Doubtful Accounts and Allowance for Loss on Refund of Interest
5. APPENDIX Full Year Allowance for Doubtful Accounts and Allowance for Loss on Refund of Interest Received by Segment （Unit：billions of yen） Domestic FY2021 2Q FY2022 2Q 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 37: Forward-looking statements notice
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 — Q2 FY2022 Earnings Presentation on 6ix