Slide 1: Management Report FY2011
Credit Saison is a supporting company of Japanese national football team Nadeshiko Japan, Women’ Women’s National Team Samurai Blue, Men’ Men’s National Team Management Report FY2011 May 22, 2012
Slide 2: Agenda
AGENDA ◆ FY2011 Highlights 1 ◆ FY2011 Financial Report 2 ◆ Management Strategies 19 ◆ Corporate Social Responsibility 43 This report contains forward-looking statements that reflect our plans and expectation. These forward-looking statements are not guarantees of future performance and known and unk
Slide 3: Main Topics of the 2011 Fiscal Year
Main Topics of the 2011 Fiscal Year ◇ Nadeshiko Japan, women’s national football team, wins the World Cup Presents SAISON Gold American Express cards to all of the team members ◇ Formed an alliance with "Regus", a French company offering rental offices in 1,200 locations all over the world Opened an
Slide 4: FY2011 Financial Report
FY2011 Financial Report 1. Financial Results 2. Results by Business Segment 3. Contributions by Consolidated Companies 4. Restructuring the real estate business 5. Main Indices (Non-Consolidated) 6. Credit Risk Trends / Interest Repayment / Review of the provision for loss on disaster 7. Financial I
Slide 5: 1. Financial Results
1. Financial Results （¥ billion ） FY2012 YoY(%) FY2010 YoY(%) FY2011 YoY(%) （Estimate） Operating revenues 285.7 93.1 244.0 85.4 250.0 102.5 Consolidated Ordinary income 33.7 86.3 38.5 114.3 50.0 129.6 Net income 12.8 68.7 9.4 73.7 29.0 306.8 Earnings per share (¥) 69 68.2 51 73.7 157 306.8 Operating
Slide 6: 2. Results by Business Segment
2. Results by Business Segment （¥ billion） Operating revenues Operating income (loss) FY2010 FY2011 YoY (%) FY2010 FY2011 YoY (%) Credit Service 230.8 198.8 (13.9) 15.9 27.1 70.0 Lease 14.4 14.6 1.5 5.0 5.0 1.2 Finance 15.5 15.7 0.9 6.7 7.7 14.5 Real Estate- related 12.3 3.0 (75.2) (2.1) (10.1) － En
Slide 7: 3. Contribution by Consolidated Companies
3. Contribution by Consolidated Companies Ordinary Ordinary income: income: Difference Difference between between consolidated consolidated and and non- non -consolidated figures non-consolidated figures Non-consolidated Consolidated Difference Contribution Contribution to to consolidated consolidat
Slide 8: 4. Restructuring the real estate business (1)
4. Restructuring the real estate business （Restructuring of the Atrium Co., Ltd.） ① By promoting early reduction of the large-scale properties to concentrate the managerial resources in our credit card and finance business, we could increase efficiency of group assets and achieve sustainable growth.
Slide 9: Restructuring the real estate business (2)
Restructuring the real estate business（Restructuring of the Atrium Co., Ltd.） ② ■ Direction of the Atrium Co., Ltd. ＜Retain company＞ ・Appropriately carried out the replacement of assets specializing in real estate securitization business of small and medium-sized, carefully selected by the purchasin
Slide 10: 5. Main Indices (Non-Consolidated)
5. Main Indices (Non-Consolidated) FY2010 FY2011 FY2012 YoY(%) YoY(%) （Estimate） YoY(%) New Applications (millions) 2.57 84.3 2.60 101.2 3.00 115.4 New Card Issued (millions) 2.12 81.9 1.96 92.5 2.20 112.2 Total Cardholders 28.34 24.75 25.20 100.2 87.3 101.8 (millions) （+0.05） （△3.59） （+0.45） Active
Slide 11: Strategic move to expand card business in the 7&i group
Strategic move to expand card business in the 7 & i group Some effects of 7CS card business split are expected to expand over the medium term contribution to the consolidated profit ■ Excluding the impact of 7CS card business split （¥ billion） FY2011 excluding the YoY(%) impact of 7CS Card Transacti
Slide 12: (Reference) Share of Cards
（Reference）Share of Cards The transaction volume per card for premium cards is 4 times that of the other cards. 【FY2011】 【Share of Total Cardholders】 【Share of Shopping Transaction Volume】 Premium 4.5% Premium SAISON MMC SAISON Proper 10.0% Proper 16.3% 19.7% 17.8% Takashimaya Takashimaya MMC 3.3% L
Slide 13: Trends in the cash advance business
Trends in the cash advance business [Credit Saison (non-consolidated)] FY 2006 End of September, 2007 Balance Operating Balance: Operating revenues (billion yen) revenues: 600.1 billion yen (billion yen) 700 118.3 billion yen 140 FY 2012 600 (Plan) 120 Balance: 500 244 billion yen Operating 100 - Re
Slide 14: 6. Credit Risk: Delinquency of over 90 days
6．Credit Risk Enhanced risk control and reduction of interest repayment claims has made progress the soundness of loans Delinquency of over 90 days Delinquency of over 90 days（Consolidated） （Non-Consolidated） 6% Cash 6% 5.39% 5.41% Advance 5% 3.91% 4.12% 4% 2.81% 2.89% 3.54% 3.40% 5% 3.58% 3.32% 3.9
Slide 15: Changes in the number of interest repayment claims processing
Changes in the number of interest repayment claims processing The interest repayment claims are in the downward trend. Monthly average number 7,000 5,900 6,000 5,100 4,900 4,700 5,000 4,400 4,000 3,100 3,000 2,500 3,200 3,200 2,000 2,500 2,700 2,300 1,000 900 1,300 0 '05 '06 '07 '08 '09 '10 '11 New
Slide 16: Credit cost / Provision for loss on interest repayment
Credit cost / Provision for loss on interest repayment Trend will continue over quality of receivables, bad debts are expected to also reduce costs this fiscal year ■Credit cost results and estimate （¥ billion） Full Year Factors of credit cost reduction Results Estimate ・Proper screening Difference
Slide 17: Review of the provision for loss related with the Great East Japan Earthquake
Review of the provision for loss related with the Great East Japan Earthquake Because collection of claims in the disaster-affected areas advanced smoothly and bad debt risk has dropped, provision for loss related with the Great East Japan Earthquake was re- calculated at the end of the year and par
Slide 18: 7. Financial Indices
7. Financial Indices (¥ billion) Consolidated Non-Consolidated From the previous From the previous year year Shareholders’ Equity 352.6 +7.4 322.5 +2.1 Total Assets 2,155.9 (75.3) 2,059.4 (38.3) Shareholders’ Equity Ratio 16.4% +0.9% 15.7% +0.4% ※1 ROE 6.6% +0.7% 7.7% +2.3% ※2 ROA 1.8% +0.3% 2.0% +0
Slide 19: 8. Dividends
8. Dividends FY2010 FY2011 FY2012 (Plan) Dividend per ¥30 ¥30 ¥30 share Total cash ¥5.5 billion ¥5.5 billion ¥5.5 billion dividend Payout ratio (consolidated) 42.9% 58.3% 19.0% 17
Slide 20: (Reference) Fund Structure
（Reference）Fund Structure (Unit: billion yen) 【Consolidated】 【Non-Consolidated】 Total Balance: 1,404.8 Total Balance: 1,364.9 Corporate Corporate bonds bonds CP 32.0 220.8 CP 32.0 220.0 Liquidation of Liquidation of receivables 105.9 receivables 105.9 Debts Debts 1,046.0 1,007.0 Long Term Ratio ： 81
Slide 21: Management Strategies
Management Strategies Ⅰ．Overview of card market Ⅱ．Medium-term management concept Ⅲ．Management Strategies in fiscal 2012 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 [ FY2011 ] Card members Card shopping transaction volume China Union Pay China Union Pay 14.0% Diners 10.5% Diners JCB (+2.2p) 0.3% JCB (+2.8p) 0.5% 3.8% 2.6% (+0.5p) (+0.9p) AMEX AMEX 4.8% Visa Visa 42.6% 13.3% (+0.1p) (▲0.6p) 43.6% (▲2.4p)
Slide 23: Changes in market share by brand in the U.S.
2. Changes in market share by brand in the U.S. Share of Shopping Transaction Volume （FY2011） Changes in transaction volume 50% Discover 42.4% 43.2% 43.3% Visa 5.6％ 40% 28.2% MasterCard Visa 30% 25.6% 26.3% AMEX 24.8％ (▲0.8p) 43.3％ 20% 24.0% 25.4% 24.8% Master (+0.1p) Card AMEX 10% 26.3％ 5.5% 5.7% 5
Slide 24: Overview of Credit Saison
3. Overview of Credit Saison ■ Brand share of Credit Saison 【April 2011 ～ January 2012】 Card members Card shopping transaction volume JCB JCB 9.2% 6.6% （▲0.5p） （▲0.3p） AMEX AMEX 9.8% 10.5% （＋2.8p） （＋2.4p） Visa Visa 49.3% MasterCard 57.0% MasterCard （▲1.3p） （▲0.9p） 25.9% 31.7% （▲1.1p） （▲1.0p） Visa Ma
Slide 25: Saison American Express Card Expansion of Service Partners
Saison American Express® Card Expansion of Service Partners PLATINUM GOLD Annual fee: Annual fee: 21,000 yen 10,500 yen * Main privileges of the Platinum card/Gold card - Priority pass : free registration (usual annual fee is 399 U.S. $) (Platinum), registration system (separate expenses to be paid)
Slide 26: Changes in transaction volume by area
4. Changes in transaction volume by area Clarification of the market shift to the Asia Pacific Ocean area Changes in transaction volume by area FY2010 transaction volume by area 60% Other N/S America 50% 6.4% 40% Europe 30% N/S America Asia-Pacific 38.0% 20% 32.5% Asia-Pacific 10% Other Europe 0% 23
Slide 27: Comparison of share by payment methods between Japan and the U.S.
5. Comparison of share by payment methods between Japan and the U.S. (1) Percentage of cash in the final private spending of 284 trillion yen is 59.1%. (2) Credit cards account for approx. 32 trillion yen, which is only 11.1%.* U.S.: 24.5%, South Korea: 57.0% U.S.A. Japan (FY 2010) (actual figures f
Slide 28: Changes in domestic credit card industry
6．Changes in domestic credit card industry 2000～01 2002～03 2004～05 2006～07 2008～09 2010～11 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 Control Moneylending Control Ac
Slide 29: Reorganization of the Domestic Credit Card Industry
7. Reorganization of the Domestic Credit Card Industry Mizuho Credit Saison Resona Sumitomo Mitsui FG FG HD Sumitomo Mitsui Card Cedyna Orico Resona Card Japan Post Bank Idemitsu Takashimaya Yamada Shizugin Credit Credit Financial Saison Card Pocket Famima Card Credit Aeon Seven Card Credit Daiwa Ho
Slide 30: Domestic market share (shopping transaction volume)
8. Domestic market share (shopping transaction volume) ■ Card shopping transaction volume (issuer base) [2010 fiscal year] FC and BC of Seven Card Service 1.5％ regional banks Our company G 5.9％ 16.5％ APLUS 1.7％ Other MI Card 2.0％ 3.4％ Our company Non-consolidated Rakuten KC 3.2％ 12.4％ Joint Venture
Slide 31: Company's Innovations in the Card Industry (1)
9. Company's Innovations in the Card Industry (1) 1982 Issued of "Seibu Card", launch of national development of business bases for issuing cards (Saison counters) ⇒ Created model for acquisition of new card members at shops with cards with no annual fees that offered instant credit/instant issue 19
Slide 32: Company's Innovations in the Card Industry (2)
Company's Innovations in the Card Industry (2) 2007 Established SAISON ASSET MANAGEMENT CO., LTD. and launched wealth accumulation services ⇒ Entered into an alliance with a U.S. company Vanguard, achieving no-load investment fund with trust fees on the lowest terms in the industry (January, 2008, r
Slide 33: Managerial concept for the medium term
Ⅱ. Managerial concept for the medium term Operate based on Collaborative Management utilizing SAISON-AMEX Cards and other strategic weapons Multiple business spheres Overwhelming customer Originality of products and channels/ services, with credit cards as the axis alliance partners extensive custom
Slide 34: Business strategy for the FY 2012
Ⅲ. Business strategy for the FY 2012 By developing our credit business on the firm basis of specialization and alliances between all of the companies within the scope of consolidation, becoming No. 1 in the industry in terms of ability to acquire new members and transaction volume, at the same time
Slide 35: Strengthen development of No.1 card industry
1. Strengthen development of NO.1 card industry ① To take market share to make your card number on a consolidated basis pioneer No.1 2011 Credit Saison New card Total transaction Ordinary （Including capital tie-up card） issued cardholders volume Income (million card (million) holders) (Trillion yen)
Slide 36: Strengthening of Industry No.1 new card member acquisition ability
1. Strengthening of Industry No.1 new card member acquisition ability Striving to enlarge the market share by expansion of our customer base ■ Maximization of the number of new members acquired with the existing channels - Strengthening of measures to acquire new active cardholders in the growing in
Slide 37: Enhancing the appeal of proper cards (1)
2. Enhancing the appeal of proper cards (AMEX/SAISON/UC) (1) Striving to enlarge the Company's market share by improving the basic functions, marketability, and services of our cards ■ Victorious companies in the card industry are essentially those companies that issue store cards Winning the compet
Slide 38: Enhancing the appeal of proper cards (2)
2. Enhancing the appeal of proper cards (AMEX/SAISON/UC) (2) Development and marketing of products and services aiming at acquiring customers of other companies and taking in the cash market ■ Issue of sub-credit cards linked to credit cards proper - Taking in the small sum transactions currently in
Slide 39: Expanding our presence in the net business
3. Expanding our presence in the net business Rapidly expanding the transaction volume of eikyufumetsu.com, cultivating the Company's marketing/advertising business ■ Rapidly expanding transaction volume of eikyufumetsu.com <Increasing number of customers> Increasing the number of internet card hold
Slide 40: Eikyufumetsu.com transaction volume / Internet members Transition
Eikyufumetsu.com transaction volume / Internet members Transition （¥ one hundred million） FY2012 （ten thousand people） 140 Net members 8.54million 800 Transaction volume Internet members Transaction volumes ¥120 billion 120 FY2010 700 Also open to non-membership card “Eikyufumetsu.com” Integration-r
Slide 41: Schematic view of the Net business
Schematic view of the Net business * Active use of the changing market - Smartphones - Social media Profit increase * Structural reform Net members * Maximization of revenues from affiliate programs - Sales of the marketing data * Updating, elaborating, and - Detailed statement on the - Sales of adv
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Slide 43: Reinforcement of Finance Business: Lease and Rental Business
4. Reinforcement of Finance Business: Lease and Rental Business Acquisition of an overwhelming market share and expansion of product areas ■ Reinforcing marketing activities among dealers run by major manufacturers - Conducting marketing activities putting particular emphasis on the dealers run by m
Slide 44: Reinforcement of Finance Business: Credit Guarantee Business
5. Reinforcement of Finance Business: Credit Guarantee Business Reinforcement of measures to enable steady accumulation of "good-quality guarantees balance" ■ Entering into new alliances - Reinforcement of activities approaching the (Billion yen） "credit banks" business category 200.0 ⇒ Aiming at en
Slide 45: Reinforcement of Finance Business: Flat 35 Housing Loans
6. Reinforcement of Finance Business: Flat 35 (Long-term Fixed Rate Housing Loans) Enriching the services available under "Saison Housing Loan Package": aiming at becoming the No.1 in the industry ◎Aim at market domination with the sense of reliability/security attached to the Saison brand. ■ Featur
Slide 46: Concrete Steps of Expansion in the Asian Market
7. Concrete Steps of Expansion in the Asian Market Entry into new areas utilizing the Company's know-how in the retail/nonbank spheres ■ Singapore - Examination of approach based on creating affiliated companies overseas that has the merits in terms of geographical superiority ■ China - From June, 2
Slide 47: CSR/Mecenat: Japan National Football Team
Ⅳ. CSR/Mecenat 1. Japan National Football Team From 2001: the Company has been renewing a supporting company contract with Japan Football Association (National Team A, Team U-23, Team U-20, Team U-17, Nadeshiko Japan, FUTSAL Team, Beach Soccer Team) (1) JAPAN Card Saison ■ Donations to Football Asso
Slide 48: Akagi Nature Park
2. Akagi Nature Park O Number of days open: FY 2011:156 days → FY 2012: 166 days (ten days more that the last year) O Number of visitors FY 2011: 27,334 → FY 2012: 32,000 (117% of the last year) By raising the level of the Nature programs offered at the park and recognizability of the park itself, s