Aeon Financial Service Co., Ltd. · TSE:8570
Aeon Financial Service — H1 FY2018 Earnings Presentation
28 slides from Aeon Financial Service's earnings presentation, Nov 14, 2018
Slide 1: First Section of the Tokyo Stock Exchange Stock Code: 8570
First Section of the Tokyo Stock Exchange Stock Code：8570 AEON Financial Service Co., Ltd. 1
Slide 2: Consolidated business outline
Consolidated business outline Domestic Global Credit card ➊ Credit card ➋ (Unit: billions of yen) Installment Housing Installment Personal Shopping sales loan (※1) sales ➌ loan Cash advance Shopping Cash advance Transaction volume 2,582.4 202.5 117.6 222.3 125.0 67.7 50.0 73.2 YoY +8.0% +3.4% -3.7%
Slide 3: Consolidated and segment results
Consolidated and segment results (Unit：Billions Domestic total Global total Conso. of yen） Adjustments Retail Solutions China Mekong Malay Total ※ ※ Area Area Area Ordinary income 145.8 94.3 87.7 67.3 9.5 35.0 22.7 -36.0 213.4 YoY +8% +11% +5% +14% +1% +17% +17% +9% +10% Change +10.8 +9.0 +4.2 +8.5
Slide 4: Domestic/Global segment results by graph
Domestic/Global segment results by graph Consolidated Domestic Global adjustments Ordinary Profit - ¥0.1bn Ordinary Profit + ¥4.4bn Ordinary Income Ordinary Expenses Ordinary Income Ordinary Expenses Consolidated +¥10.8bn +¥10.9bn +¥4.1bn adjustments +¥8.5bn + ¥0.2bn Ordinary ・Holding company, Profi
Slide 5: Consolidated balance sheet
Consolidated balance sheet Consolidated results Results Change from Topics ※（）:Change from start of FY （Unit：Billions of yen） start of FY Cash and deposits 674.8 +24.3 ・Domestic balance：¥636.0bn (+¥19.2bn) →attributed by increase in finance receivables Loan and bills discounted* 2,314.9 +43.3 ・Balan
Slide 6: Improve profitability of asset ~capital efficiency by securitization~
Improve profitability of asset ~capital efficiency by securitization~ ■Improvement of yield and duration gap as well as compression of risk asset through funding by securitization ■Make use of low-cost funding available from AEON Bank and sale to external investors depending on level of balance of f
Slide 7: Main initiatives for FY2018
Main initiatives for FY2018 ■ A Complete Digital Shift ■ Meeting Customer Needs through a Wider Range of Products and Services ■ Speeding Up the Growth of Our Global Business AEON Financial Service Co., Ltd. 7
Slide 8: Summary of initiatives for the first half of FY2018
Summary of initiatives for the first half of FY2018 AEON Financial Service Co., Ltd. 8
Slide 9: Domestic Business: Digital Shift, Customer Needs
Domestic Business Digital Shift Customer Needs ■ Introducing better services with the utilization of FinTech Initiatives to promote paperless operations ➢Encouraged customers to switch from paper to e-statements through registration on smartphone app “AEON Wallet” ⇒Percentage of total billings issue
Slide 10: Domestic Business: new ATM function for card magnetic stripe repair
Domestic Business Digital Shift Customer Needs ■ Introduction of new ATM function: Repairment of card magnetic stripe ● Card reissuance and enquiries 1 No. of card reissuance cases：YoY -62%（Sep.） (No. of cases in thousands) 【Reduction effect】 ・Expenses related to reissuance of card： 35 approx. 30 mi
Slide 11: Domestic Business: AEON Card as the Main Card
Domestic Business Customer Needs ■ AEON Card as the Main Card Transaction Volume Within and Outside Average Use Per Month AEON Group Stores Number of transactions （件） Billions of yen （億円） AEON グループ内 Outside AEON グループ外 10 Group Group 3,000 300 2,500 250 9.5 2,000 200 1,500 150 1,000 9 100 500 50 0 8.
Slide 12: Domestic Business: Emphasis on Asset Management Business
Domestic Business Customer Needs ■ Emphasis on Asset Management Business Improving ・iDeco, Tsumitate NISA product ・Foreign currency lineup deposits ・A wide array of products Direct management of Refinement AEON Bank branches of branch since Oct 2017 structure implemented at all 106 agency branches T
Slide 13: Global Business: Digital Shift of Global Business
Global Business Speeding up Growth Digital Shift of Global Business ■ Solving Social Issues while Introducing Digitalization in Our Products/Services ● Expansion of Auto Loan Business ● Auto Loan Business Scheme Utilizing IoT Device in the Philippines ①Vehicle purchased via loan ・Expansion of servic
Slide 14: Global Business: Customer Needs of Global Business
Global Business Speeding up Growth Customer Needs of Global Business ■ Topline growth and achieving better credit quality through acquisition of customers from the high-income segment ● Malaysia：AEON Platinum Card ● Thailand：ÆON ROYAL ORCHID PLUS Card Loan Products with interest rate set based on ri
Slide 15: Global Business: Growth in topline with cardholders
Global Business Speeding up Growth of Global Business ■ Further growth in the topline achieved together with increase in cardholders （millions of people） （billions （億円） of yen） 1,350 13.5 Ordinary Ordinary income 700 70 income 1,300 13.0 No. of cardholders 650 65 12.5 1,250 600 60 1,200 12.0 1,150 5
Slide 16: Global Business: Control of bad debt expenses
Global Business Speeding up Growth of Global Business ■ Increase of bad debt expenses is controlled through refinement of credit screening and credit collection policies/systems (billions of yen) Ordinary income 800 80 Personnel Expenses 10% Bad debt expenses 貸倒費用/営業債権残高 ¥67.3bn Bad debt expenses/Fi
Slide 17: Progress and schedule of system/IT investments
Progress and schedule of system/IT investments Main initiatives FY2018 Main areas of investments Mobile app: Addition of asset management and payment function Keywords: Convenient Digital Shift Expansion of fee business and development of new products 【To improve quality of products/ services】 Domes
Slide 18: Initiatives from second half of FY2018
Initiatives from second half of FY2018 AEON Financial Service Co., Ltd. 18
Slide 19: Domestic Business: Expansion of new customer base
Domestic Business Digital Shift Customer Needs ■ Expansion of new customer base: Male and the Younger Generation ・AEON Card（SKE48） Cardholders can select the card design on the smartphone app AEON Wallet featuring their favorite idol ⇒Promotion of more app downloads from the young ・AEON NEXCO Nishi-
Slide 20: Domestic Business: Towards Cashless, Cardless Payments
Domestic Business Digital Shift Customer Needs ■ Towards Cashless, Cardless Payments Promotion of Contactless Payments Introduction of contactless payment function to match international standards in view of the upcoming 2020 Tokyo Olympics since Nov 2018 ⇒Cashless payment method to meet the demands
Slide 21: Global Business: Digital Shift, improving accessibility via smartphones
Global Business Speeding up Growth Digital Shift of Global Business ■ Improving accessibility via the use of smartphones ［Malaysia］ ［India］ ・Launched smartphone app AEON Wallet ・Instant credit screening made possible (Malaysian version) with launch of app “AEON FAST” Payments via QR Code introduced
Slide 22: Global Business: Catering to various customer segments
Global Business Speeding up Growth Digital Shift Customer Needs of Global Business ■ Catering to various customer segments by enhancing the range of products/ services lineup To serve the higher income segment To serve the middle/lower income segment ［Thailand］ ［Indonesia］ Issuance of AEON J-Premier
Slide 23: (Reference) FY2018 Business Plan (Domestic)
(Reference) FY2018 Business Plan (Domestic) FY 2018 1H FY 2018 Change from Results start of FY Plan YoY Number of cardholders 28.11mil +0.36mil 28.80mil +1.05mil Results YoY Plan YoY Card shopping transaction volume ¥2,582.4bn +8.0％ ¥5,500.0bn +11.1％ Change from Results start of FY Plan YoY Balance
Slide 24: Forecast of Results for FY2018
Forecast of Results for FY2018 FY2018 Forecast YoY Ordinary income ¥440.0bn +7.9％ Ordinary profit ¥72.5bn +10.3％ Net income attributable to owners of parent ¥42.0bn +8.6％ （Net income per share） （¥194.66） Interim 第2四半期末 Year End Full Year Payout Ratio Plan YoY Forecast YoY Forecast YoY Forecast YoY D
Slide 25: (Reference) FY2018 1H Results (Hong Kong, Thailand, Malaysia)
(Reference) FY 2018 1H Results (Hong Kong, Thailand, Malaysia) FY2017_1H FY2018_1H Results YoY Results YoY AEON Total Revenue (※2) 652,213 99％ 680,500 104％ CREDIT Profit before tax 210,796 114％ 275,989 131％ SERVICE (ASIA) Profit for the period attributable to : 173,784 114％ 231,231 133％ (HK$’000) Ow
Slide 26: (Reference) FY2018 1H Results (Hong Kong, Thailand, Malaysia)
(Reference) FY2018 1H Results (Hong Kong, Thailand, Malaysia) ■ Consolidated Results of AEON Credit Service (Asia) Co., Ltd. FY 2017 1H FY 2018 1H Exchange rates: HKD 1 Results Results YoY ・FY2017 1H：¥14.29 ・FY2018 1H：¥13.92 Ordinary income 9.3 9.4 +2% Fiscal period Ordinary profit 3.0 3.8 +28% ・201
Slide 27: (Reference) Allowance for Doubtful Accounts and Loss on Refund of Interest by Segment
(Reference) Allowance for Doubtful Accounts and Allowance for Loss on Refund of Interest Received by Segment ■ Allowance for Doubtful Accounts (by Segment) ■ Allowance for Loss on Refund of Domestic Interest Received Retail Solutions Total FY2017 1H FY2018 1H Allowance for doubtful accounts, beginni
Slide 28: 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 — H1 FY2018 Earnings Presentation on 6ix