Slide 1: Management Report FY2010
Management Report FY2010 May 17, 2011
Slide 2: FY2010 Financial Report
FY2010 Financial Report ◆ FY2010 Highlights ･･･ 1 ◆ FY2010 Financial Report ･･･ 2 ◆ Factors influencing performance ･･･ 15 in this fiscal year ◆ Prospects for the Card Market ･･･ 20 ◆ FY2010 Management Strategy ･･･ 27 ◆ CSR ･･･ 36 This report contains forward-looking statements that reflect our plan
Slide 3: Main Topics for FY2010
Main Topics for FY2010 ◇ Start of management of Akagi Nature Park (April) ◇ Announcement of strengthening of partnership ties with American Express (June) ◇ Full enforcement of Money Lending and Business Contlole and Regulation Law on June, 18 (June) ◇ Entry into prepaid card business with issuance
Slide 4: FY2010 Financial Report
FY2010 Financial Report 1. Financial Results 2. Results by Business Segment 3. Contributions by Consolidated Companies 4. Main Indices (Non-Consolidated) 5. Credit Risk Trends / Trends in Interest Repayment 6. Financial Indices 7. Dividends 2
Slide 5: 1. Operating Results
1. Operating Results (¥ billion) FY2011 FY2009 YoY(%) FY2010 YoY(%) YoY(%) （Estimate） Operating revenues 306.8 93.8 285.7 93.1 261.0 91.4 Consolidated Ordinary income 39.1 126.3 33.7 86.3 30.0 88.9 Net income 18.6 － 12.8 68.7 17.0 132.5 Earnings per share (¥) 10.2 － 6.9 67.6 9.2 133.3 Operating 257.
Slide 6: 2. Results by Business Segment
2. Results by Business Segment （¥ billion） Operating revenues Operating income (loss) FY2009 FY2010 YoY(%) FY2009 FY2010 YoY(%) Credit Service 250.1 230.8 92.3 25.6 15.9 62.3 Lease 12.5 14.4 114.9 2.1 5.0 236.7 Finance 16.8 15.5 92.6 5.0 6.7 135.6 Real Estate- related 15.0 12.3 82.0 1.8 (2.1) － Ente
Slide 7: 3. Contribution to Consolidated Results
3. Contribution to Consolidated Results Ordinary Ordinary income: income: Difference Difference between between Non- Non-consolidated Consolidated Difference consolidated consolidated and and non- non -consolidated figures non-consolidated figures Ordinary ¥28.7 billion ¥33.7 billion ¥5.0 billion Co
Slide 8: (Reference) Progress of Atrium Reorganization Plan
(Reference) Progress of Atrium Reorganization Plan The 5-year reorganization plan is proceeding as planned ■ Measures taken in previous fiscal year ・Recorded a profit of 1.1 billion yen on the sale of a portion of our large housing (book value of 6 billion yen) ・Enhanced new purchases of favorable s
Slide 9: 4. Main Indicators (Non-consolidated)
4. Main Indicators (Non-consolidated) FY2009 FY2010 FY2011 YoY (%) YoY (%) （Estimate） YoY (%) New applications (millions) 3.05 104.1 2.57 84.3 2.80 108.9 New card issued (millions) 2.59 102.9 2.12 81.9 2.30 110.6 Total cardholders 28.29 102.6 28.34 100.2 25.80 91.0 (millions) （+0.72） （+0.05） ( △2.54
Slide 10: (Reference) Share of Cards
（Reference）Share of Cards The transaction volume per card for premium cards is 4 times that of the other cards. 【Share of Total Cardholders】 【Share of Shopping Transaction Volume】 Premium card 4.8% MMC SAISON SAISON 9.6% Proper Premium card Prorer 16.2% 17.4% LABI Seibu・ 19.6% Seibu・ 7.8% Sogo・ MMC
Slide 11: 5. Credit Risk
5．Credit Risk (％) Delinquency of over 90 days Write-off rate Y-o-Y Y-o-Y Consolidated 3.40 (0.14) 3.55 +0.35 Credit Card 3.32 (0.26) 4.36 +0.52 Card Shopping 2.38 (0.15) 2.24 +0.14 Cash advances 5.41 +0.02 9.15 +2.35 ※Delinquency rate: Percentage of total receivables 90days or more past due date ※Wr
Slide 12: Forecast for claims handled by lawyers
Forecast for claims handled by lawyers Trends: Expect further decline Number of cases of the first half calmed Risk: For possible influence by the down and dropped to about 30% to 40% Tohoku Earthquake, provision was from the previous year made for loss on interest repayments. ■ Trends in new intere
Slide 13: Credit cost/Provision for loss on interest repayment
Credit cost/Provision for loss on interest repayment In the last fiscal year, an additional 11 billion yen provision was made against loss on repayments. ■Credit cost results and estimate (¥ billion) Full Year Estimate Factors of credit cost Results reduction Difference ・Proper screening ・Strengthen
Slide 14: 6. Financial Indices
6. Financial Indices Consolidated Non-consolidated Y-o-Y Y-o-Y Shareholders’ equity 345.2 +6.3 320.3 +0.6 Total Assets 2,231.2 (142.9) 2,097.7 (102.7) Shareholders’ equity ratio 15.5% +1.2% 15.3% ＋0.8% ※ ROE 6.0% (1.1%) 5.4% (1.1%) ※ ROA 1.5% (0.1%) 1.3% (0.2%) ※1 ROE is calculated to assume that re
Slide 15: 7. Dividends
7. Dividends FY2009 FY2010 FY2011 (Estimate) Dividend per share ¥30 ¥30 ¥30 Total cash ¥5.4 billion ¥5.5 billion ¥5.5 billion dividend Payout ratio 29.3％ 42.9％ 32.4％ (consolidated) 13
Slide 16: (Reference) Fund Structure
（Reference）Fund Structure (Unit: billion yen) 【Consolidated】 【Non-consolidated】 Total Balance: Total Balance: 1,652.3 1,571.6 Corporate Corporate bonds bonds CP 256.1 255.0 CP 110.0 110.0 Liquidation of Debts Liqu idation of Debts receivables 999.0 receivables 1,078.6 207.6 207.6 Long Term Ratio： ：7
Slide 17: Factors influencing performance: Cash advance trends
Factors influencing performance in this fiscal year ① - Cash advance trends （including influence of split of 7CS) Although influence due to total lending restrictions remains, we shall seek to recover a favorable debt balance in the midterm ■ Plan for cash advance service transaction ・Acquisition of
Slide 18: Factors influencing performance: Split of 7CS card business
Factors influencing performance in this fiscal year ② - Split of 7CS card business Influence during previous fiscal year (single year) estimated conservatively, forecast for profit recovery in future ■Influence on operation ■Influence on income （Unit: billion yen） New cards issued Shopping income (1
Slide 19: Split of 7CS card business: Seeking substantial increase in profit
Factors influencing performance in this fiscal year - Split of 7CS card business Seeking substantial increase in profit （Units: million cards/ billion yen) Influence of Compared Influence of Previous FY split after Current FY plan to previous split deductions FY New cards issued 2.12 (0.14) 1.98 2.3
Slide 20: Factors influencing performance: Influence of the earthquake
Factors influencing performance in this fiscal year ③ - Influence of the earthquake 震災の影響は前期に保守的に引当し、今期業績への影響は軽微 震災の影響は前期に保守的に引当し、今期業績への影響は軽微 The influence of the earthquake was conservatively allocated to the previous FY, thereby reducing influence on performance in the current FY ■ Measures comple
Slide 21: Management Strategies
Management Strategies Ⅰ. Prospects for the Card Market Ⅱ. Credit Saison Business Strategy ～ Midterm Management Vision ～ Ⅲ. FY2011 Priority Strategies Ⅳ. Corporate Social Responsibility 19
Slide 22: Overview of card market: Brand share in global market
Ⅰ．Overview of card market （１） Brand share in global market [ FY2010] Card members Card shopping transaction volume JCB JCB Diners Diners 3.3% 0.3% China Union Pay 1.7% 0.5% China Union Pay 7.7% 11.8% AMEX AMEX 4.7% 13.9% Visa Visa 45.0% 45.7% MasterCard MasterCard 34.9% 30.5% Union （Unit: Dollars） V
Slide 23: Changes in transaction volume by area
(2) Changes in transaction volume by area Changes in transaction volume by area FY 2009 transaction volume by area 60% Other 6.1% 50% N/S America 40% 30% Europe Asia-Pacific N/S America 28.2% 41.2% 20% Asia-Pacific 10% Other Europe 0% 24.5% 2001 02 03 04 05 06 07 08 09 （From FY2008 Union Pay has bee
Slide 24: Changes and forecasts for settlement methods in America
(3) Changes and forecasts for settlement methods in America ＜ 2009 ＞ ※Source： NILSON REPORT 7.6 trillion dollars Changes and forecasts for settlement method share Prepaid/ Other 4.2% 35% Check 30% 27.9% Credit card 28.6% Check Cash 27.1% 20.5% 25% 25.2% 19.8% 20% 20.9% Cash 15.8% 15% Debit card 12.7
Slide 25: Current status of settlement methods in Japan
(4) Current status of settlement methods in Japan ＜ 2009 ＞ Amount of currency circulating for 280. 3 trillion yen （nominal） major countries （as of the end of 2009） ※Conversion rate （end of 2009） ：1 dollar ＝92.43 yen Prepaid/ Convenience store/ Amount of Circulation Electronic money COD 2.6% currency
Slide 26: Changes in domestic credit card industry
(5) Changes in domestic credit card industry 2000～01 2000～ 2002～03 2002～ 2004～05 2004～ 2006～07 2006～ 2008～09 2008～ 2010 Enactment of revised Supreme Court decision to return Enactment of Article 3 of the Full enactment of the revised Investment Act excessive interest payments revised Moneylending Co
Slide 27: Reorganization of the Domestic Credit Card Industry
(5) Reorganization of the Domestic Credit Card Industry Sumitomo Mitsui FG Mizuho Credit Saison Resona FG HD Mitsui Sumitomo Card Cedyna Orico Resona Shizugin Card Idemitsu Takashimaya Yamada SAISON Japan Post Bank Credit credit Financial Card Promise ORIX Sanyo Credit Shinpan YM Aeon Daiwa House Se
Slide 28: Domestic market share (shopping transaction volume)
(Reference) Domestic market share (shopping transaction volume) ■ Card shopping transaction volume (issuer base) [2009 fiscal year] FC and BC of regional banks 5.7％ Our company G APLUS 16.7％ 1.5％ Other Our company Rakuten KC 2.2％ 8.4％ Non-consolidated 12.7％ Joint Venture Card companies 4.0％ Life 2.7
Slide 29: Credit Saison Business Strategy: Midterm Management Vision
II. Credit Saison Business Strategy ～ Midterm Management Vision ～ （１） Generate innovation in the card industry （２） Pursue customer benefits (convenience, status, perks) （３） Respond to shareholder expectations （４） Contribute to the competitive advantage and sales expansion of affiliated corporations
Slide 30: Credit Saison Business Strategy: Corporation Management
(2)Credit Saison Business Strategy ～Corporation Management～ Unparalleled customer channels/affiliated partners Pursue corporation management which takes advantage of neutrality Full lineup of business fields Creative products/services, centered around credit cards solid customer base [ Strategic adv
Slide 31: Midterm Priority Strategy
Eliminating cash payment is the most important (3)Midterm Priority Strategy ～ issue of Credit Saison （１） Expansion of top-line income ① Create card development channels by using the NEW SAISON AMERICAN EXPRESS CARD as a strategic advantage ② Establish the No. 1 unparalleled system for card developme
Slide 32: Priority Strategy(1): Saison American Express Card
Ⅲ. Priority Strategy(1) ～ Saison American Express® Card ■ Shopping transactions for our company by international brand 【April 2010 to February 2011】 JCB Expand AMEX brand share by collaborating AMEX 6.7% with corporations that possess 8.1% a high affinity with the Saison American Express® Card Visa
Slide 33: Saison American Express Card: Main services
Saison American Express® Card 〖Main services〗 ★・・・NEW Permanently usable points (1,000 yen = one point / indefinite term): Saison Platinum 2 times in foreign countries / 1.5 times in Japan American Express® Card Concierge service: operating 24 hours 365 days a year Priority pass: free registration (
Slide 34: Priority Strategy(2): Net Business
Priority Strategy(2) Net Business Expand fee business through cultivation of existing business and development of new business ■Cultivation of existing businesses (expand transaction volume of eikyufumetsu.com) *From September 2010, open to individuals who are not card members and perform renewal as
Slide 35: (Reference) Diagram of Internet Business
[Reference] Diagram of Internet Business Use points Shopping appropriation service, exclusive internet items, etc. Expand income Reduce costs ・Affiliate income Net members New businesses ・Web statement ・Marketing data sales ・Web news ・Expansion of advertising Business by utilizing our company’s web
Slide 36: Priority Strategy(3): Finance Business
Priority Strategy (3) Finance Business Financing business : Strengthen income by expanding Flat 35 ■ Expanding Flat 35 ・Target of new loans in FY2011: 3,500 (compared to previous year: 175%); Target of transaction volume: 89.1 billion yen (compared to previous year: 161%) ・Strengthen relations with
Slide 37: Priority Strategy(4): Increase robustness of business structure
Priority Strategy(4) Increase robustness of business structure Establish industry’s No.1 credit management/collection system ■ Suppress risk by promptly responding to environmental changes such as laws/regulations Implement credit strategy which responds to trends such as the post-quake economic env
Slide 38: Akagi Nature Park: Operation Overview
Akagi Nature Park: Operation Overview Approximately 24,000 people (240% increase compared to previous year) visited the park from April to November. Visits to the park were concentrated in peak periods such as spring, when a large number of flowers bloom, late September, when tiger butterflies can b
Slide 39: FY2011 Operation Overview
FY2011 Operation Overview Based on trends in visitors during the previous year, we have changed the days on which the park is open to spring, summer and autumn. This schedule is in conjunction with peak periods in nature, and will allow more people to enjoy beautiful and rich nature. Cooperation fro