Aeon Financial Service Co., Ltd. · TSE:8570
Aeon Financial Service — 3Q FY2017 Earnings Presentation
20 slides from Aeon Financial Service's earnings presentation, Mar 6, 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 results and business outline
Consolidated results and business outline First Half of FY2017 3Q 1-3Q Cumulative （Unit: Billions of yen) Results YoY Results YoY Results YoY Ordinary income 194.5 +8％ 102.1 +9％ 296.6 +8％ Ordinary expenses 165.9 +8％ 85.9 +9％ 251.9 +9％ Ordinary profit 28.5 +4％ 16.1 +9％ 44.7 +6％ *depreciation Amount o
Slide 3: Consolidated results of business scale
Consolidated results of business scale FY2016 4Q FY2017 1H FY2017 3Q Results YoY Results Change from Results Change from start of FY start of FY ➊ No. of cardholders 38.94 mil +1.72 mil 39.84 mil +0.90 mil 40.25 +1.31 mil No. of domestic 26.92 mil +1.04 mil 27.39 mil +0.47 mil 27.58 +0.66 mil cardho
Slide 4: Results by segment
Results by segment Domestic total Global total (Unit： Adjustments Total Billions of yen） ※ Retail Solutions ※ China Mekong Malay Area Area Area Ordinary income 205.5 131.4 126.3 90.3 14.4 46.1 29.6 △51.4 296.6 YoY +7％ +6％ +6％ +11% +4％ +11％ +15％ +2％ +8％ Change +14.1 +7.3 +6.8 +9.0 +0.5 +4.7 +3.8 △0.9
Slide 5: Domestic/Global area results by graph
Domestic/Global area results by graph ■Expenses related to domestic up-front investments are being covered by growth in overseas biz Domestic Consolidated Global adjustments Ordinary Profit -¥0.6bn Ordinary Profit +¥4.4bn Consolidated Ordinary Income Ordinary Expenses Ordinary Income Ordinary Expens
Slide 6: Consolidated balance sheet
Consolidated balance sheet Cumulative Consolidated results Results Change from Topics ※（）:Change from start of FY （Unit：Billions of yen） From 1Q-3Q start of FY ・Domestic balance：¥524.2bn (+¥19.1bn) Cash and deposits 561.1 +26.5 →increase due to favorable trend in credit card trxns Loan and bills dis
Slide 7: 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 8: Situation of direct management of AEON Bank branches
Situation of direct management of AEON Bank branches ■ Speed up the pace of increment of balance of investment trust after direct management After direct management （Oct-Dec, 2017） ・Continuous staff training ・Building IT infrastructure Raise standard of Monthly increment 1H（Apr-Sep） using AI consult
Slide 9: Initiatives for improvement of convenience and labor productivity
Initiatives for improvement of convenience and labor productivity ■ Integration of domestic HQ functions ・ Increase operational efficiency and labor productivity by reassigning personnel to strategic investment divisions Enhance efficiency of middle and Dec Mar strategic investment Nov Creation of b
Slide 10: Initiatives through IT/digitalization (Domestic)
Initiatives for improvement of convenience and labor productivity (Domestic) ■ Initiatives through IT・digitalization Key Word Initiatives ・Automated chat service through AI Easy access ・Credit card recruitment via Pepper ・Concierge service using AI Simple ・Paperless housing loan application Speedy p
Slide 11: Initiatives for Global segment (2H) - Mekong Area
Initiatives for Global segment（2H） Mekong Area Transition of credit cost at AEONTS ●Thailand 5,000 30.0% ・Optimization of credit cost 4,000 Revenue ・Strengthen monitoring to customers 26.2% 20.0% 営業収益 (Left) 3,000 25.0% who increased credit limit Bad debts and 19.1% 貸倒引当金繰入額 doubtful accounts ・Unifi
Slide 12: Initiatives for Global segment (2H) - China and Malay Area
Initiatives for Global segment（2H） China Area ●Hong Kong AEON Credit Service (Asia) ・Increase revenue and profit via expansion of Transition of comparison <YoY> card receivables in 3Q ・Issuance of 「ONE PIECE Mastercard」 1Q 2Q 3Q Ordinary income -1% -2% +6% ●China ・Improve profitability of 3 micro-fi
Slide 13: Forecast of Results for FY2017
Forecast of Results for FY2017 ■ Domestic：Sustainable growth of card shopping transaction volume and improve productivity through integration of HQ functions ■ Global：Expansion of topline by new business and controlling bad debt allowance FY2017 Forecast YoY Ordinary income ¥390bn +4.0％ Ordinary pro
Slide 14: (Reference) FY2017 3Q Results (Hong Kong, Thailand, Malaysia)
(Reference) FY2017 3Q Results (Hong Kong, Thailand, Malaysia) FY2016 1Q-3Q FY2017 1Q-3Q Results YoY Results YoY AEON Total Revenue (※2) 960,274 -3％ 994,194 +4％ CREDIT SERVICE Profit before tax 275,650 +25％ 331,712 +20％ (ASIA) Profit for the period attributable to : 226,007 +26％ 274,018 +21％ (HK$’000
Slide 15: (Reference) 1Q-3Q FY2017 Results (Hong Kong, Thailand, Malaysia)
(Reference) 1Q-3Q FY 2017 Results (Hong Kong, Thailand, Malaysia) ■ Consolidated Results of AEON Credit Service (Asia) Co., Ltd. FY 2016 1Q-3Q FY 2017 1Q-3Q Exchange rates: HKD 1 Results Results YoY ・FY2016 3Q：¥13.89 ・FY2017 3Q ：¥14.34 Ordinary income 13.3 14.2 +7% Fiscal period Ordinary profit 3.8
Slide 16: (Reference) Allowance for Doubtful Accounts and Allowance for Loss on Refund of Interest
(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 FY2016 1Q-3Q FY2017 1Q-3Q Allowance for doubtful accounts, b
Slide 17: (Reference) FY2017 Business Plan (Domestic)
(Reference) FY 2017 Business Plan (Domestic) FY 2017 3Q FY 2017 Change from Results start of FY Plan YoY Number of cardholders 27.58mil +0.66mil 28.00mil +1.08mil Results YoY Plan YoY Card shopping transaction volume 3,691.9bn +10.0％ 5,000.0bn +10.7％ Change from Results start of FY Plan YoY Balance
Slide 18: Customers
Our Vision “Asia’s No. 1 Retail Financial Service Company ■ Improve convenience and access to financial products and services by utilizing the latest IT technology ■ More proactive efforts in approaching customers as existing financial institutions are unable to provide sufficient services ■ Matchin
Slide 19: (Reference) Definition of "Adjustments" based on presentation format
(Reference) Definition of “Adjustments” based on presentation format Brief Report Retail Solutions China Mekong Malay Adjustment Total amounts Includes HQ/Shared function companies, transactions between business segments FACT BOOK ≪Operating Segment Performance≫ P.6 (FY2017 3Q) Consoli Domestic Glob
Slide 20: 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 — 3Q FY2017 Earnings Presentation on 6ix