Aeon Financial Service Co., Ltd. · TSE:8570
Aeon Financial Service — H1 FY2017 Earnings Presentation
32 slides from Aeon Financial Service's earnings presentation, Nov 14, 2017
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 1Q 2Q First Half of FY2017 （Unit: Billions of yen) Difference from Results YoY Results YoY Results YoY forecast Ordinary income 94.0 +4％ 100.4 +11％ 194.5 +8％ +18.5 Ordinary expenses 82.0 +7％ 83.9 +9％ 165.9 +8％ +18.9 Ordinary profit 11.9 -13％ 16.5 +21％ 28.5 +
Slide 3: Consolidated results of business scale
Consolidated results of business scale FY2016 4Q FY2017 1Q FY2017 1H Results YoY Results Change from Results Change from start of FY start of FY No. of cardholders 38.94 mil +1.72 mil 39.35 mil +0.41 mil 39.84 mil +0.90 mil ➊ No. of domestic 26.92 mil +10.4 mil 2,714 mil +0.22 mil 27.39 mil +0.47 mi
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 135.0 85.2 83.4 58.8 9.4 29.9 19.3 △33.0 194.5 YoY +8％ +4％ +6％ +8％ -0％ +7％ +13％ -3％ +7％ Change +9.8 +3.5 +4.7 +4.2 +0 +1.9 +2.2 +1.0 +13.5 O
Slide 5: Domestic/Global segment results by graph (Domestic)
Domestic/Global segment results by graph (Domestic) Ordinary income +3.57 Ordinary Income +4.73 ・Growth of revo. & installment bal. ・Rise in card txns Domestic Credit card income +3.64 Card shopping income +3.32 ･Rise in housing loan bal. Credit guarantee fee +1.16 Loan income +1.75 ・Rise in hire pu
Slide 6: Domestic/Global segment results by graph (Global)
Domestic/Global segment results by graph (Global) Global Ordinary income +0.02 ・Txn growth mainly at AEON stores due to favorable response Ordinary income +1.98 Ordinary income +2.20 to promotional campaigns related ・Co-branded card with Big C ・Rise in use of hire purchase for to new services Credit
Slide 7: Consolidated balance sheet
Consolidated balance sheet Consolidated results Results Change from Topics ※（）:Change from start of FY （Unit：Billions of yen） start of FY Cash and deposits 487.2 -47.4 ・Domestic balance：¥453.0bn（-¥52.0bn） →increase due to favorable trend in credit card txns Loan and bills discounted* 3,051.3 +293.9
Slide 8: 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 9: Summary: Domestic business
Summary：Domestic business ■Favorable growth in shopping transactions, rise in cardholders attributed to recruitment efforts through new co- branded cards: Positive trend expected to continue from 2Q onwards. New promotional efforts targeted at increasing cardholders and shopping transactions will be
Slide 10: Summary: Global business
Summary: Global business ■Expansion of business scope in Hong Kong, Thailand, Malaysia (with listed companies) in local currency ■Initiatives for stricter credit screening and credit management led to control of bad debt expenses （billions of yen） Ordinary income 【Ordinary income】 Personnel expenses
Slide 11: Future Direction
Future Direction AEON Financial Service Co., Ltd. 11
Slide 12: Customers: Our Vision, Asia's No.1 Retail Financial Service Company
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 13: Progress and schedule in IT/System investment
Progress and schedule in IT/System investment Investment amount and main areas of Investment amount and main areas of Objective Effect ‘ investment in FY2017 2Q investment in FY2017 (planned) Domestic Domestic ¥10.0bn ¥25.5bn ・Next generation credit Improve ・Store renewal card system correspondence
Slide 14: Main initiatives from FY2017 2H
Main initiatives from FY2017 2H ■ Improvement of convenience and labor productivity ■ Improvement of asset profitability ■ Re-growth of global business AEON Financial Service Co., Ltd. 14
Slide 15: Improvement of convenience and labor productivity
Improvement of convenience and labor productivity ■ Enhance digitalization efforts at point of touch with customers ・Instantaneous approach towards each and every customer through the AEON Wallet app ・Improving efficiency through digitalization i.e. smartphone function allows checking of advertiseme
Slide 16: Strengthen marketing efforts
Strengthen marketing efforts ■ Provide convenient and useful information to customers by strengthening alliance with merchants and the use of the latest IT technology ■ Encourage more customers to shop at AEON stores through promotions targeted at individual customer needs by collaborative analysis
Slide 17: Improvement of asset profitability and labor productivity
Improvement of asset profitability and labor productivity ■ Increase sales of products/services thus asset profitability through direct management of AEON Bank branches ・All branch employees can now provide full-line services(※): more time for one-on-one customer consultation, thus higher level of s
Slide 18: Re-growth of global business
Re-growth of global business ■Expansion towards new customer segments, use of smartphone app China Area Mekong Area Malay Area Target areas for Differentiation by card ・Auto loan business ・Acquisition of point card improvement recruitment and usage ・Co-branded card with Big C customers Customer prom
Slide 19: 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 20: AEON Thana Sinsap Thailand FY2017 1H Initiatives
AEON Thana Sinsap Thailand FY2017 1H Initiatives AEON Financial Service Co., Ltd. 20
Slide 21: Consolidated results and business outline
Consolidated results and business outline 1H YoY / Consolidated （Unit：THB Mil） Topics Results Change Credit card 27,434 +16% ・Issuing new co-branded card with a major Personal Loan 19,246 -17% hyper-market and revising customer credit Other 3,333 +19% screening led transaction volume high ・New card
Slide 22: Key Initiatives 1 – New customer acquisition
Key Initiatives 1 – New customer acquisition ■ Issuing co-brand card with major hyper market “Big C” in May 2017 ・Set card recruitment counter s at our branch and 131 Big C stores ・Acquisition of customer in 1H：113K（Target+14%） ■Start immediate issuance card at Big C and our counters and stores 【Cre
Slide 23: Key Initiatives 2 – Optimization of credit cost
Key Initiatives 2 – Optimization of credit cost ■Improved provision of allowance for doubtful accounts due to continued reviewing of standard of screening ■Improved ratio of account receivable from 3 months up 【 Credit Cost】 【 account receivable】 営業収益（左軸） 【Billion 【Billion Revenue Baht】 Account rece
Slide 24: Future direction
Future direction AEON Financial Service Co., Ltd. 24
Slide 25: Expansion of customer base
Expansion of customer base ■Provide financial service that match customer income ■Strengthen efforts to card-less by adding member card function on mobile app Customer segment Our Service More than Bt30K ・Credit card (Platinum / Gold) ・Processing Monthly More than Auto ・Virtual card income Bt15K Fi-
Slide 26: Initiatives at Cambodia
Initiatives at Cambodia ■E-money ■Collaboration with MGS Co. ・Eliminating inconvenience of usage of KHR ・Provide loans to people rejected from by promoting national currency distribution screening due to income and credit through ・Planning to provide Settlement / Remittance IoT devices to remote con
Slide 27: (Reference) FY2017 1H Results (Hong Kong, Thailand, Malaysia)
(Reference) FY2017 1H Results (Hong Kong, Thailand, Malaysia) FY2016 1H FY2017 1H Results YoY Results YoY AEON Total Revenue (※2) 659,189 -1% 652,213 -1% CREDIT SERVICE Profit before tax 185,576 +26% 210,796 +14% (ASIA) Profit for the period attributable to : 152,142 +27% 173,784 +14% (HK$’000) Owne
Slide 28: (Reference) 1H FY2017 Results (Hong Kong, Thailand, Malaysia)
(Reference) 1H FY 2017 Results (Hong Kong, Thailand, Malaysia) ■ Consolidated Results of AEON Credit Service (Asia) Co., Ltd. FY 2016 1H FY 2017 1H Exchange rates: HKD 1 Results Results YoY ・FY2016 1H：¥13.98 ・FY2017 1H：¥14.29 Ordinary income 9.2 9.3 +5% Fiscal period Ordinary profit 2.5 3.0 +16% ・20
Slide 29: (Reference) Allowance for Doubtful Accounts and 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 1H FY2017 1H Allowance for doubtful accounts, beginni
Slide 30: (Reference) FY2017 Business Plan (Domestic)
(Reference) FY 2017 Business Plan (Domestic) FY 2017 1H FY 2017 Change from Results start of FY Plan YoY Number of cardholders 27.39mil +0.47mil 28.00mil +1.08mil Results YoY Plan YoY Card shopping transaction volume 2,390.5bn +10.6％ 5,000.0bn +10.7％ Change from Results start of FY Plan YoY Balance
Slide 31: (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.8 (FY2017 1H) Consoli Domestic Glob
Slide 32: Forward-looking statements notice
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 — H1 FY2017 Earnings Presentation on 6ix