Credit Saison Co., Ltd. · TSE:8253
Credit Saison — FY2009 Earnings Presentation
45 slides from Credit Saison's earnings presentation, May 18, 2010
Slide 1: Management Report FY2009
Management Report FY2009 May 18, 2010
Slide 2: Agenda
AGENDA ◆ FY2009 Highlights ･･･ 1 ◆ FY2009 Financial Report ･･･ 2 ◆ FY2009 Management Strategy ･･･ 15 ◆ Prospects for the Card Market ･･･ 34 ◆ CSR ･･･ 40 This report contains forward-looking statements that reflect our plans and expectation. These forward-looking statements are not guarantees of futu
Slide 3: Main Topics of the 2009 Fiscal Year
Main Topics of the 2009 Fiscal Year Start of applications for “Mitsui Shopping Park Saison Card”, a card that can be used in Mitsui Fudosan LaLaport and 13 facilities of management (April) Digital terrestrial broadcasting: start of service of returns equivalent to Eco-Points supplied by the Gove
Slide 4: FY2009 Financial Report
FY 2009 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. Effects of the Full-scale Enforcement of Money Lending Business Law 7. Financial Indices
Slide 5: Operating Results
1.Operating Results (¥ billion) FY2010 FY2008 YoY (%) FY2009 YoY (%) YoY (%) (Estimate) Operating 327.0 94.6 306.8 93.8 288.0 93.9 revenues Ordinary 30.9 53.3 39.1 126.3 21.0 53.7 Consolidated income Net income (55.5) － 18.6 － 9.0 48.2 Earnings per share (¥) (30.8) － 10.2 － 4.9 48.0 Operating Non-co
Slide 6: Results by Business Segment
2.Results by Business Segment (¥ billion) Operating revenues Operating income (loss) FY2007 FY2008 YoY (%) FY2007 FY2008 YoY (%) Credit Service 254.7 245.1 (3.8%) 25.6 27.7 7.9% Finance 46.7 32.3 (30.7%) 10.5 8.1 (23.1%) Real Estate- related 18.5 15.0 (19.0%) 0.6 1.8 198.0% Entertainment 15.5 14.6 (
Slide 7: Contribution to Consolidated Results
3.Contribution to Consolidated Results Ordinary Ordinary income: income: Difference Difference between between Non-consolidated Consolidated Difference consolidated consolidated and and non- non -consolidated figures non-consolidated figures Ordinary ¥33.7 billion ¥39.1billion ¥5.4 billion income Co
Slide 8: (Reference) Progress of Atrium Reorganization Plan
(Reference) Progress of Atrium Reorganization Plan The first year of the reorganization plan is progressing as planned Measures implemented in the last FY x Financial assistance ～ assumption of debts with exemption from responsibility, DES, making subsidiaries 100% owned by exchange of shares x Sp
Slide 9: Main Indicators (Non-consolidated)
4.Main Indicators (Non-consolidated) FY2008 FY2009 FY2010 YoY (%) YoY (%) (Estimate) YoY (%) New applications (millions) 2.93 86.7 3.05 104.1 3.0 98.4 New card issued (millions) 2.52 88.7 2.59 102.9 2.5 96.5 Total cardholders 27.57 106.0 28.29 102.6 28.70 101.5 (millions) [+1.56] [+0.72] [(0.41)] Ac
Slide 10: (Reference) Share of Cards
（Reference）Share of Cards The transaction volume per card for premium cards is 5.1 times that of the other cards. 【Share of Total Cardholders】 【Share of Shopping Transaction Volume】 (total: 26,98million) (total: ¥3,805billion) SAISON Proper 19.３% 《SAISON》 AFFINITY 《SAISON》 AFFINITY AMEX-SAISON GOLD
Slide 11: Credit Risk
5.Credit Risk (%) Delinquency of over 90 days Write-off rate Y-o-Y Y-o-Y Consolidated 3.54 +0.65 3.20 +0.23 Credit Card 3.58 +0.69 3.84 +0.35 Card Shopping 2.53 +0.43 2.10 +0.15 Cash advances 5.39 +1.27 6.80 +0.99 ※Delinquency rate: Percentage of total receivables 90days or more past due date ※Write
Slide 12: Trends in Loss on Interest Repayments
5. Trends in Loss on Interest Repayments A temporary increase due to An asset added to the New occurrences remain high, the effect of regulations provision for loss on interest but become lower than in the imposed by Money Lending repayment at the end of the previous year Business Law is expected te
Slide 13: Effects of Full Enforcement of Money Lending Business Law
6. Effects of Full Enforcement of Money Lending Business Law A trial calculation of the effects of full-scale enforcement of Money Lending Business Law that can be estimated at the present stage ■ Cash advance transaction volume, balance, and profits decrease due to market reduction and total lendin
Slide 14: Financial Indices
6.Financial Indices (¥ billion) Consolidated Non-consolidated Y-o-Y Y-o-Y Shareholders’ equity 338.9 +20.6 319.7 +15.4 Total Assets 2,374 (32.9) 2,200.4 (20.3) Shareholders’ equity ratio 14.3% +1.1% 14.5% +0.8% ※1 ROE 7.1% +1.8% 6.5% +0.7% ※2 ROA 1.6% +0.3% 1.5% ±0% ※1 ROE is calculated to assume th
Slide 15: Dividends
7.Dividends Dividends FY2008 FY2009 FY2010 (Estimate) Dividend per share ¥30 ¥30 ¥30 Total cash ¥5.4 billion ¥5.5 billion ¥5.5 billion dividend Payout ratio － 29.3％ 61.2％ (consolidated) 13
Slide 16: (Reference) Fund Structure
（Reference）Fund Structure (Unit: billion yen) 【Consolidated】 【Non-consolidated】 Total Balance: Total Balance: 17,730 16,452 Long Term Ratio：76% Long Term Ratio ：78% Fixed Ratio：67％ 【 Rating 】 Balance of Bonds payable and Long-term loans payable: 1,001,700 million yen R&I A+ Average time to maturity:
Slide 17: Business Strategy
Business strategy Ⅰ. Changes in business environment and their impact on our company in particular and the industry in general Ⅱ. Change of consumption environment Ⅲ. Business strategy of Credit Saison Group Ⅳ. Important measures for the 2010 fiscal year CORPORATE STRATEGY ２０１０ CREDIT SAISON CO., LT
Slide 18: Business Environment Change and its Impact
Ⅰ. Business Environment Change and its Impact on our Company and the Industry in General ■ Change of external environment -The worst days of the global monetary crisis are over, and the concerns of economic double bottom have lessened. -In Japan, as it is still taking time to improve the employment
Slide 19: Structural Change of Consumption Market
Chart (1) Structural Change of Consumption Market (Unit: trillion yen) ■ Trends of final consumption expenditure of domestic households by consumption item Comparing The object of expenditure FY1998 FY2008 with 10 years ago 1st place Amusement, leisure, and culture 27.7 58 209.3% 2nd Communication 5
Slide 20: Trends in Net-sales of Internet-order Sales and Retail-trade
Chart (2) Trends in Net-sales of Internet-order Sales and Retail-trade (Unit: trillion yen) 04→ Industry 2004 2005 2006 2007 2008 2009 2009 YoY Internet- Internet-order 228.3% sales 2.8 3.6 3.8 4.9 6.2 6.5 (YoY) YoY) 125% 106.1% 129.3% 126.1% 105.6% - Department 83.6% stores 7.8 7.8 7.7 7.7 7.3 6.5
Slide 21: Trends of Related Industries and Card Transaction Volume
Chart (3) Trends of Related Industries and Card Transaction Volume (comparison with corresponding months of last year, %) （％） 20.0 Dept. Stores Supermarkets Convenience Stores Food service Travel 26 Shopping 26 Cash advance 15.0 10.0 5.0 +3.9% +1.8% 0.0 -4.9% -5.0 -5.3% -5.7% -10.0 -8.3% -15.0 -20.0
Slide 22: Changes in Individual Spending Habits
Chart (4) Changes in Individual Spending Habits ■April, 2009 - March, 2010 Affiliated Store by Industry YoY% Transaction Volume (SAISON brand) Rank Transaction Number Transaction Value Transaction Volume 1 ETC 136.1% Communication 107.5% Communication 113.9% 2 Medical 118.8% Home Electronics 100.8%
Slide 23: Credit Saison Group Business Strategy
Ⅲ．Credit Saison Group Business Strategy Achievement of the Structural Reform and of the Innovations (1) Branch Network (1) Business with corporations (corporate cards, lease and rental) (2) Agent functions (cultivation of affiliated stores) (3) Area marketing (expansion in allied shop numbers) (2) S
Slide 24: Competitive advantages and shift into multi-financial business
(6) Competitive (1) Multi-functionalization of eikyufumetsu.com advantages (2) Generalization of discount system (3) Card brand image establishment (7) Shift into multi (1) Reform and expansion of credit guarantee business financial business (2) Innovation of mortgage-backed lending business/ flat 3
Slide 25: FY2010 Priority Policies
Ⅳ. FY2010 Priority Policies 1. Measures for Expanding the Profitability of the Card Business 2. Measures for Expanding the Profitability of the Financial Business 3. Corporate Social Responsibility （environmental philanthropy） CORPORATE STRATEGY ２０１０ CREDIT SAISON CO., LTD. 23
Slide 26: Card Business Profitability: Card expansion and development
1. Measures for Expanding the Profitability of the Card Business (1) Card expansion and development aimed at achieving a stable number of cards (3 million) and a raise in expansion performance ■Strengthening of expansion and development of important products - Selection of the products for expansion
Slide 27: Affiliation strategy: Alliance with Seven & I Holdings
1. Measures for Expanding the Profitability of the Card Business (2) Affiliation strategy (1) "Comprehensive business alliance with Seven & I Holdings" ■Details of the basic agreement (concrete details are under discussion by the both companies and are to be concluded around summer of this year) ・Ma
Slide 28: Affiliation strategy: New AMEX Deal
1. Measures for Expanding the Profitability of the Card Business (3) Affiliation strategy (2) Development of a joint policy ‘New AMEX Deal’ ■Massive expansion of transaction volume utilizing AMEX Brand - A strong marketing program with the ‘AMEX’ Brand - Setting up a differentiation strategy uniting
Slide 29: Entering growing industries, shift from Mono to Koto
1．Measures for Expanding the Profitability of the Card Business (4) Measures aimed at entering the growing industries, providing services (Not selling goods): shift from Mono (goods) to Koto (services) ■Area strategy - Industry-traversing campaign starting from the metropolitan areas such as Ikebuku
Slide 30: Business structure reform of Saison counters
1. Measures for Expanding the Profitability of the Card Business (5) Business structure reform of Saison counters, aiming at strengthening points of contact with customers ■Abandoning acceptance of payments at the counters, strengthening points of contact and sales - Raising the efficiency of paymen
Slide 31: Reform of card business profit structure via internet cardholders
1. Measures for Expanding the Profitability of the Card Business (6) Reform of card business profit structure and new business infrastructure construction by further development of the number of internet card holders ①Expansion of the number of internet card holders by cooperation with the leading e
Slide 32: Schematic of Internet Business
[Reference] Schematic of Internet Business Expansion of Profits Internet cardholders Cost Reduction （ Net Answer, @ U-Net ） ・Internet billing ・Affiliated profit ・Profit from advertising ・WEB News ・Profit from printing WEB Profiling ・WEB card expansion News Providing appropriate ・Receipt of money and
Slide 33: Cost control: 7 billion yen cost reduction
1．Measures for Expanding the Profitability of the Card Business (7) Cost control: "7 billion yen cost reduction through structural reform of the enterprise" ■Bills cost (▲ reduction of ¥ 2 billion ) ・Web details expansion, promotion of postcard-type detailed statements, 25g weight saving for letters
Slide 34: Financial Business: Lease & rental
2. Measures for Expanding the Profitability of the Financial Business (1) Lease & rental business “Massive expansion of rental business" ■Rental business ・・・Rental transaction volume: 585% compared with last year ・Expansions into the not yet cultivated industry of home electronics rental (future dem
Slide 35: Financial Business: Loan business
2. Measures for Expanding the Profitability of the Financial Business (2) Loan business " Strengthening of Profits by Expansion of flat 35" ■Expansion of flat 35 ・New implementation target for FY2010: 2,000 subscriptions (+1,500 subscriptions YoY) ・Focusing our operating energy on achieving 80% rati
Slide 36: Share of the Global Market by Brand
1. Share of the Global Market by Brand ■Changes in transaction volume share for each ％ international brand <2008 shares of global transaction volume> 70 DINERS JCB 0.3% 1.0% 60 VISA AMEX 50 MASTER China 8.1% China UnionPay Union AMEX Pay 40 JCB 13.2% DINERS 30 VISA 53.1% MASTER 20 24.3% 10 0 2000 20
Slide 37: Share and Growth Potential by Area
2. Share and Growth Potential by Area ■Changes in transaction volume ％ share by area <2008 transaction volume shares by area> 70 Other 1.8% 60 50 Asia- N./S. America Pacific Europe 15.4% 40 Asia-Pacific Other 30 North/South America 52.9% 20 Europe 29.9% 10 0 2000 2001 2002 2003 2004 2005 2006 2007 *
Slide 38: Changes in U.S. Market Share
3. Changes in U.S. Market Share JPMorgan Chase, which purchased Washington Mutual, holds the top share, and further concentration is continuing. Citi and Amex were hurt by the financial crisis and both their balance and share dropped. ■Loan balance share by issuer ■Ranks by cards issued (10,000s car
Slide 39: Changes in U.S. settlement method and forecast
4. Changes in U.S. settlement method and forecast ■Changes in shares of major methods of settlement in household consumption [Trend development 2002 - 2012] 40 ％ 100% Electronic Cash 6 settlement Checks 17 Credit cards Debit cards Other 30 75% 33 Card settlement 54 20 50% 60 25% Paper-based 10 settl
Slide 40: 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 Card Idemitsu Takashimaya Yamada Japan Post Bank Credit credit Financial Promise ORIX Sanyo Credit Shinpan Shizugin SAISON Daiwa House YM Aeon Financi
Slide 41: Changes in the Domestic Market Share
(6) Changes in the Domestic Market Share (Shopping Transaction Volume) [FY2000] JCB•G [FY2008] Our Company G 10.1 13.6 Our Sumitomo Our Co. intimacy Company Mitsui G JCB Company with UC 0.7% 6.5 9.9 6.6 9.2% Affiliate Orico Close partners 3.8% 2.4% of JCB Others 3.5 23.9% Sumitomo Mitsui Others 6.0
Slide 42: Corporate Social Responsibility: Akagi Nature Park
3. Corporate Social Responsibility（Environmental Philanthropy） ～Introduction of Akagi Nature Park Akagi Nature Park ●Features “Not growing flowers, but helping them grow by improving the environment surrounding them" In the park carefully maintained on the base of this principle, there is one of the
Slide 43: Information on Akagi Nature Park
(1) Information on Akagi Nature Park ● Basic information Address: 892, Akagi-cho, Minami-Akagi-san, Shibukawa-shi, Gunma-ken Area size: Approximately 120ha Altitude and location 600-700m above the sea level; the west side of Mt. Akagi Access: 20 minutes by taxi from Shibukawa Station of JR Joetsu Li
Slide 44: The four seasons of Akagi Nature Park
(2) The four seasons of Akagi Nature Park ● Animals and plants existing in Akagi Nature Park 1,810 species of animals and insects, 77 species of birds, 15 species of mammals Plants: 152 species of trees and 510 species of grass Spring Summer Autumn Winter
Slide 45: Management structure
(3) Management structure Official sponsors: ※As of May 14, 2010 We are proud to support the environmental preservation activities at Akagi Nature Park.