Credit Saison Co., Ltd. · TSE:8253
Credit Saison — H1 FY2005 Earnings Presentation
36 slides from Credit Saison's earnings presentation, Nov 22, 2005
Slide 1: Management Report (Interim FY2005)
Management Report (Interm FY2005) November 22, 2005 Credit Saison Co., Ltd.
Slide 2: Agenda
AGENDA Overview of Business for First Half of FY 2005 Overview of Business Explanation of Revisions to Perforation Estimates Management Strategy for FY 2005 The figures contained in this document, which describe the outlook of business etc, are projected calculations based on conclusions and supposi
Slide 3: Half-Year Financial Report for FY 2005
Half-Year Financial Report for FY 2005 CORPORATE STRATEGY CREDIT SAISON CO., LTD.
Slide 4: Contents
CONTENTS Financial Report for FY 2005 Overview of Business Highlights Operating Results Credit Risk Trends Financial Indices Main Indices (Non-Consolidated) CORPORATE STRATEGY CREDIT SAISON CO., LTD. 1
Slide 5: Highlights of First Half of FY 2005
Highlights of First Half of FY 2005 Non-consolidated Consolidated Start of operation at new credit center “Ubiquitous” Started issuing “Mizuho Mileage Club Card SAISON” through alliance with Mizuho First and Second Quarter Financial Group Started new “Prince Card” through alliance with PRINCE HOTELS
Slide 6: Business Results
Business Results ( )=YOY Consolidated Non-Consolidated Operating First Half of FY 2004 ¥117.2 billion (108%) ¥92.8billion (107%) revenues First Half of FY 2005 ¥127.8billion (109%) ¥100.0billion (108%) First Half of Ordinary FY 2004 ¥28.0 billion (113%) ¥22.9billion (109%) income First Half of FY 20
Slide 7: Results by Business Segment
Results by Business Segment Units: Billion yen % Operating revenues Operating income First Half First Half of First Half First Half of FY 2004 FY 2005 YOY of FY 2004 of FY 2005 YOY Credit & Finance 95.3 104.7 9.9% 23.5 27.7 17.8% Entertainment 8.2 8.8 7.5% 0.5 1.2 113.9% Real estate 7.2 8.4 16.3% 3.
Slide 8: Contribution to Consolidated Results
Contribution to Consolidated Results Consolidated Consolidated Trends Trends Contribution Contribution to to Consolidated Consolidated Results Results (Units: Billion yen; times) First First FY Half of Half of Main consolidated subsidiaries Contribution 2005 FY 2005 to ordinary FY 2004 (target) inco
Slide 9: Operating Revenues (Consolidated/Non-Consolidated)
Operating Revenues (Consolidated/Non-Consolidated) With strong performance in every segment, consolidated operating revenue came in at ¥3.8 billion higher than initial targets. Unit: Billion yen Consolidated Unit: Billion yen Non-Consolidated 266.0 240.4 14.0 220.3 214.0 214.8 212.2 190.2 11.0 175.7
Slide 10: Ordinary Income (Consolidated/Non-Consolidated)
Ordinary Income (Consolidated/Non-Consolidated) Surpassed initial targets by ¥7.0 billion (consolidated) and ¥2.0 billion (non-consolidated) as a result of effect from parent-company cost-cutting and strong performance at consolidated subsidiaries, including companies accounted for by equity method
Slide 11: Net income (Consolidated/Non-Consolidated)
Net income (Consolidated/Non-Consolidated) Surpassed initial targets by ¥4.7 billion (consolidated) and ¥1.0 billion (non-consolidated) Unit: Billion yen Consolidated Unit: Billion yen Non-Consolidated 31.8 22.0 24.3 25.8 15.0 22.4 12.0 13.3 5.0 11.6 15.3 18.2 6.0 16 12.1 15.0 12.2 9.3 20.7 15.8 14.
Slide 12: Credit Risk Trends
Credit Risk Trends The trend has cooled down in delinquent receivables of over 90 days. *Delinquency rate: Percentage of total receivables past due 90 days or more. Consolidated Non-Consolidated Cash advances delinquency rate Total credit card delinquency rate Shopping delinquency rate CORPORATE STR
Slide 13: Credit Risk Trends: Credit Costs
Credit Risk Trends Credit Costs First half year Consolidated Non-Consolidated Billion yen Consolidated figures are aggregate delinquency costs. Billion yen Write-off Write-off Revised number 44.8 Net increase in allowance for bad dept 39.5 3.8 Revised number 37.3 18.1 36.3 19.1 1.6 3.8 1.4 28.3 41.2
Slide 14: Financial Indices
Financial Indices Ratings Stability Shareholders’ equity ratio steady R&I A+ Profitability Reached medium-term target of 10% consolidated ROE S&P A- First half year Consolidated Non-Consolidated Shareholders’ equity ratio 23.0% 22.7% 19.3% 19.1% 20.0% 23.1% 23.0% 19.9% 21.9% 18.4% Shareholders’
Slide 15: Funding Structure
Funding Structure Consolidated Non-Consolidated 50% 52% 57% 60% 60% 59% 64% 66% 60% 66% 10% 13% 11% 15% 14% 12% 16% 16% 15% 13% 12% 19% 15% 9% 6% 6% 9% 7% 5% 5% 17% 17% 22% 18% 19% 18% 19% 15% 16% 17% CORPORATE STRATEGY CREDIT SAISON CO., LTD. 12
Slide 16: Funding Structure
Funding Structure Consolidated Non-Consolidated 70% 68% 62% 64% 49% 56% 61% 56% 66% 55% 61% 57% 57% 51% 49% 46% 51% 44% 39% 34% CORPORATE STRATEGY CREDIT SAISON CO., LTD. 13
Slide 17: Main Indices for First Half of FY 2005
Main Indices for First Half of FY 2005 ( )=YOY New applications 1.39 million (122%) New cards issued 1.17 million (120%) Total card members 17.50 million (107%) +600,000 from end of previous period +320,000 from Active card members 9.15 million (107%) end of previous period Transaction volume ¥1,385
Slide 18: New applications
New applications Exceeded plan, reflecting positive trends in new credit card applications, including new affinity cards Units: Million 2.7 2.7 2.5 2.4 2.1 1.2 1.3 1.3 1.3 1.1 0,000 25 Y YO % 112 1.5 1.4 1.2 1.0 1.1 CORPORATE STRATEGY CREDIT SAISON CO., LTD. 15
Slide 19: New cards issued
New cards issued Nearly in line with plan, reflecting steady new card applications. Units: Million 2.5 2.4 2.3 2.1 1.9 1.2 1.2 1.2 1.2 0.9 ,0 00 190 Y 1.4 YO 1.1 % 1.2 0.9 1.0 119 CORPORATE STRATEGY CREDIT SAISON CO., LTD. 16
Slide 20: Total card members & Active card members
Total card members & Active card members Increase in activity at start of period and expansion of ongoing payment of utility bills, etc., helped to boost number of active cardholders Units: Million 17.5 18.2 15.9 16.4 16.9 0,000 60 9.4 8.6 8.8 9.2 8.4 15 ,0 00 920 320 CORPORATE STRATEGY CREDIT SAISO
Slide 21: Transaction volume
Transaction volume Target for fiscal year revised upward by ¥12.0 billion due to improved external environment and marketing efforts Units: Million 2,862 2,596 1 2,343 2,409 2,121 1,465 13,428 1,203 1,232 1,117 2,000 13 Y YO % 111 1,385 1,140 1,176 1,253 1,004 CORPORATE STRATEGY CREDIT SAISON CO., L
Slide 22: Credit loan outstanding
Credit loan outstanding Minor adjustment in full-year target due to adjustment of card transaction volume Units: Million 629 617 542 575 592 40 40 40 40 40 1,376 000 1,470 59 , Y 1,647 1,305 YO 1,435 % 104 4,000 19 Y YO 3,776 3,753 3,841 105% 4,035 4,130 30 CORPORATE STRATEGY CREDIT SAISON CO., LTD.
Slide 23: Explanation of Revisions to Performance Estimates
Explanation of Revisions to Performance Estimates Explanation of Revisions to Performance Estimates Units: Million Reason for the Revision Previous Revised Amount of of the Performance forecast forecast change Forecasts Operating 252 266 14 Consolidated revenues Ordinary 60 64 40 income Net income 3
Slide 24: Management Strategies FY 2005
Management Strategies FY 2005 CORPORATE STRATEGY CREDIT SAISON CO., LTD.
Slide 25: Contents
CONTENTS Management Strategies FY 2005 1. Using Alliances to Stimulate the Card Business 2. New Growth Drivers 3. The Group’s Full Power and Future Initiatives CORPORATE STRATEGY CREDIT SAISON CO., LTD. 21
Slide 26: Stimulating Effects of Affinity Cards
1. Using Alliances to Stimulate the Card Business Stimulating Effects of Affinity Cards Sales Division “Area marketing” (Uses regional characteristics) Credit Card Division Credit Division “Client linkage” “Outbound (Increases no. of “Three-in-One” structure approach” cardholders and use) strengthen
Slide 27: Becoming No. 1 Card to Activate Card Use
1. Using Alliances to Stimulate the Card Business Becoming No. 1 Card to Activate Card Use Recurring payment use (as of Sept. 2005) ¾Number of cardholders using card for recurring payments (utility fees, mobile phone bills, newspaper subscriptions, cardholders’ insurance premiums) Recurring payment
Slide 28: Alliance-based Growth Strategy
1. Using Alliances to Stimulate the Card Business Alliance-based Growth Strategy Appeal to wealthy customers Alliance with hotel industry’s top-class Prince Hotels: Reinforced highly loyal customer base new “Prince Card” Strengthening T&E services to offer higher status: Acquired new premium card us
Slide 29: Alliance-based Growth Strategy: Business Alliances
1. Using Alliances to Stimulate the Card Business Alliance-based Growth Strategy Business alliances ¾Measures to raise added value of credit cards T&E Insurance Securities Investment Commenced sale of term deposits with SAISON Permanent Points: “SAISON Sumishin Money Club” Developed automobile insur
Slide 30: Joint Card with Mizuho Bank
2. New Growth Drivers Joint Card with Mizuho Bank Use of MMC Card SAISON Analysis of cards issued May-September Customer segment Shopping activity Usage through September for cards issued in May MMC Saison Total Other financial MMC cards Male 65 33 Active ratio within first three month 36 27 Female
Slide 31: Merger with UC Card
2. New Growth Drivers Merger with UC Card We will leverage economies of scale to conduct aggressive sales and rapid business development, as we aim to capture the top industry share with support from customers. January 2006 October 2005 November 2005 Top industry share 32% 91% Credit Saison Co., Ltd
Slide 32: Effect of Merger with UC CARD Co., Ltd.
2. New Growth Drivers Effect of Merger with UC CARD Co., Ltd. Unit: Billion yen Credit Saison UC Card Total Comment business business (Note 3) 253 1,378 Balance Receivables Simple calculation Sheet 1,125 (Note 1) Total assets 1,384 253.4 1,637.4 Simple calculation Interest-bearing debt 1,022 182 1,2
Slide 33: Aiming to be the No. 1 Card Company
2. New Growth Drivers Aiming to be the No. 1 Card Company Marketing Marketing Operations Operations Know-how External Network Customer environment Distribution E-money E-money Distribution network network Female Female customers customers Customer Customer that that organizes organizes Young Young g
Slide 34: Strengthening Finance-Related Businesses
3. The Group’s Full Power and Future Initiatives Strengthening Finance-Related Businesses While strengthening existing businesses in response to market needs, we will promote diversification of our revenue base by leveraging our know-how. Progress and targets of businesses Business Sector September
Slide 35: Asset Value Enhancement Business
3. The Group’s Full Power and Future Initiatives Asset Value Enhancement Business (Use of people, equipment, know-how and other assets on hand) In addition to promoting business reinforcement through alliances and M As, we will build growth strategies in the business areas of each company, including
Slide 36: Joint Venture Alliance Businesses Turn Profitable
3. The Group’s Full Power and Future Initiatives Joint Venture Alliance Businesses Turn Profitable Joint venture companies on track to contribute to consolidated profits as income in equity of affiliated companies Lawson CS Card, Inc. Idemitsu Credit Co., Ltd. Investment ratio 30% 50% 2 million Tota