Credit Saison Co., Ltd. · TSE:8253

Credit Saison — FY2019 Earnings Presentation

44 slides from Credit Saison's earnings presentation, May 19, 2020

1. Slide 1: Financial Results Briefing of FY2019

   Financial Results Briefing of FY2019 May 19, 2020 Credit Saison Co., Ltd. Copyright © CREDIT SAISON Co.,Ltd All Rights Reserved.

2. Slide 2: Agenda

   AGENDA  Financial Results of the first year (FY2019) of Mid-term Management Plan Financial Policy & Capital Policy Director, Managing Executive Officer, Shingo Baba Head of Corporate Planning Dept., Corporate Risk Management Dept., Treasury & Accounting Dept.  Mid-term Management Plan Progress & F

3. Slide 3: Financial Results of FY2019 and Financial & Capital Policy

   Financial Results of the first year (FY2019) of Mid-term Management Plan Financial Policy & Capital Policy ・Financial Results of FY2019 P.5-P.8 ・Financial Policy & Capital Policy P.9-P.11 Copyright © CREDIT SAISON Co.,Ltd All Rights Reserved. 4

4. Slide 4: FY2019 Financial Report - Financial Results (IFRS)

   Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives FY2019 Financial Report ~ Financial Results (IFRS) (billion yen) Net revenue 350.0 • Payment business and finance business drove the overall business performance 304.8 311.4 *Please

5. Slide 5: Results by Business Segment (IFRS)

   Financial Report Financial Policy & Mid-term Management Plan ESG related Capital Policy Progress & Future Initiatives Results by Business Segment (IFRS) <Net revenue> ■ Contribution by consolidated companies (IFRS) (billion yen) 304.8 +2% 311.4 Major consolidated Income Major equity method Income su

6. Slide 6: Credit Risk

   Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Credit Risk Delinquency rate is maintained at a relatively low level [Consolidated] Delinquency over 90 days 【Consolidated】 ’17 FY2019 Bad debts cost ’07 6.0% • Changes in shopping b

7. Slide 7: Interest Repayment Claims

   Financial Report Financial Policy & Mid-term Management Plan ESG related Capital Policy Progress & Future Initiatives Interest InterestRepayment RepaymentClaims Claims New interest repayment claims Increase provision for loss on Revise forecasts with the and price per claim were up on interest repay

8. Slide 8: Financial Policy (Structure of Interest-bearing Debt)

   Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Financial Policy (Structure of Interest-bearing Debt) ■Sound financial foundations ■Regarding structure of interest-bearing debt: • Credit Rating R&I A+ • Almost 70% of the interest-

9. Slide 9: Regarding Management Indicators

   Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Regarding Management Indicators Maintaining and improving financial soundness as a priority, aiming to improve asset efficiency by realizing sustainable growth through strategic inve

10. Slide 10: Status of Shareholder Returns

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Status of Shareholder Returns There are no changes to our basic policies on profit sharing. In FY2020, the scheduled dividend payout is 45 yen per share based on the policy of mainta

11. Slide 11: Mid-term Management Plan and Progress & Future Initiatives

    ◆ Mid-term Management Plan and Progress & Future Initiatives ・Mid-term Management Plan (FY2019-2021) P.13 - P.15 ・Impacts of the Novel Coronavirus (COVID-19) P.16 - P.17 ・Progress of Core Businesses and Outline for Development P.18 - P.38 Copyright © CREDIT SAISON Co.,Ltd All Rights Reserved. 12

12. Slide 12: Medium-Term Management Plan (FY2019 - FY2021)

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Medium-Term Management Plan (FY2019 – FY2021) Medium-Term Management Vision Medium-Term Management Vision Neo Finance Company in Asia Mission Statement A Finance Company Advancing wi

13. Slide 13: Reconstruction of Branding Strategy

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Reconstruction of Branding Strategy Reconstruction of the Saison brand and brand establishment in Asia Redesign of corporate logo and Saison brand logo VISION Redesigned to a simpler

14. Slide 14: Mid-term Management Plan - Numerical Targets

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Mid-term Management Plan（FY2019-2021） - Numerical Targets - ■Business results forecasts for FY2020 are pending because it is difficult to make accurate and reasonable estimates at th

15. Slide 15: Impacts of the Novel Coronavirus (COVID-19)

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Impacts of the Novel Coronavirus (COVID-19) <Payment business>  Transaction volumes down greatly on the previous year due to partner retailers being requested to close or shorten th

16. Slide 16: Impacts of the Novel Coronavirus (COVID-19)

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Impacts of the Novel Coronavirus (COVID-19) <Asset formation loan business> < Flat 35 loans business> ■ Business operations carried on with minimum employees ■ Hugely decreased due t

17. Slide 17: The three main focuses

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Medium-Term Management Plan (FY2019 – FY2021) The three main focuses Ⅰ. Growth strategies and structural reform in the Payment Business Ⅱ. Further expansion of Finance Business Ⅲ. Ex

18. Slide 18: Growth strategies and structural reform

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Medium-Term Management Plan (FY2019 – FY2021) Ⅰ. Growth strategies and structural reform in the Payment Business Ⅰ. Growth strategies and structural reform in the Payment Business 1.

19. Slide 19: Strengthening customer base through new partnership networks

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives I. Growth Strategies and Structural Reform in the Payment Business 1. Expansion of shopping transaction volumes <BtoC field> ①-1 Strengthening customer base through expansion of new

20. Slide 20: Initiatives with Daiwa Securities Group

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives I. Growth Strategies and Structural Reform in the Payment Business 1. Expansion of shopping transaction volumes <BtoC field> ①-2 Strengthening customer base through expansion of new

21. Slide 21: Expansion of partners as issuer - FY2020 Key points

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives I. Growth Strategies and Structural Reform in the Payment Business 1. Expansion of shopping transaction volumes <BtoC field> ①-3 Strengthening customer base through expansion of new

22. Slide 22: Revitalizing card use through services based on card usage

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives I. Growth Strategies and Structural Reform in the Payment Business 1. Expansion of shopping transaction volumes <BtoC field> ② Revitalizing card use by shifting from “regular service

23. Slide 23: Regarding new initiatives

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives I. Growth Strategies and Structural Reform in the Payment Business 1. Expansion of shopping transaction volumes <BtoC field> Regarding new initiatives ＜FY2019 Results＞ <Results> ＜FY2

24. Slide 24: Redefining Saison counters

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives I. Growth Strategies and Structural Reform in the Payment Business 2. Expansion of shopping transaction volumes <BtoC field> ⑤ Redefining Saison counters ＜FY2019 Results＞ ＜FY2020 Key

25. Slide 25: Streamlining of cashless methods between companies

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives I. Growth Strategies and Structural Reform in the Payment Business 2. Expansion of shopping transaction volumes <BtoC field> ① Streamlining of cashless methods in settlement between

26. Slide 26: Expansion to SME market

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives I. Growth Strategies and Structural Reform in the Payment Business 2. Expansion of shopping transaction volumes <BtoB field> ② Expansion to SME market ＜FY2019 Results＞ ＜FY2020 Key po

27. Slide 27: Expansion of revolving / cash advance balance

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives I. Growth Strategies and Structural Reform in the Payment Business 3. Expansion of revolving / cash advance balance Enhancing merchantability and convenience in line with customer ne

28. Slide 28: Initiatives in insurance business

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives I. Growth Strategies and Structural Reform in the Payment Business 4. Initiatives in insurance business Promote insurance business to approximately 27 million cardholders by making f

29. Slide 29: Stepping up efforts in asset management business

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives I. Growth Strategies and Structural Reform in the Payment Business 5. Creation of new businesses and enhancement of digital marketing ① Stepping up efforts in asset management busine

30. Slide 30: Improving members' QoL through digital x service

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives I. Growth Strategies and Structural Reform in the Payment Business 5. Creation of new businesses and enhancement of digital marketing ② Improving members’ QoL through the evolution o

31. Slide 31: The three main challenges

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Medium-Term Management Plan (FY2019 – FY2021) The three main challenges Ⅰ. Growth strategies and structural reform in the Payment Business Ⅱ. Further expansion of Finance Business Ⅲ.

32. Slide 32: Further expansion of Finance Business - FY2019 Results

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Ⅱ. Further expansion of Finance Business – Strengthening relationships with partners and expand new alliances ＜FY2019 Results＞ New ■Expanding finance products lineup by introducing n

33. Slide 33: Strengthening relationships with partners - FY2020 Key points

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives II. Further expansion of Finance Business – Strengthening relationships with partners and expand new alliances ＜FY2020 Key points＞ ■ Further accelerate the merger of payment and fina

34. Slide 34: The three main challenges

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Medium-Term Management Plan (FY2019 – FY2021) The three main challenges Ⅰ. Growth strategies and structural reform in the Payment Business Ⅱ. Further expansion of Finance Business Ⅲ.

35. Slide 35: Expanding the earnings base of global business

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Ⅲ. Expanding the earnings base of global business toward future Transition from “sowing” to “harvesting” stage in operation countries ＜FY2019 Results＞ ■Expanding operation areas in a

36. Slide 36: Transition from sowing to harvesting stage in operation countries

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Ⅲ. Expanding the earnings base of global business toward future Transition from “sowing” to “harvesting” stage in operation countries Myanmar Thailand China Undertaking the business-

37. Slide 37: Transition from sowing to harvesting - FY2020 Main focus

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Ⅲ. Expanding the earnings base of global business toward future Transition from “sowing” to “harvesting” stage in operation countries ＜FY2020 Main focus＞ ■Making decision and focusin

38. Slide 38: ESG Related

    ◆ ESG Related Copyright © CREDIT SAISON Co.,Ltd All Rights Reserved. 39

39. Slide 39: Basic approach to ESG Management

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Basic approach to ESG Management Based on our “leading-edge service company” management philosophy, we contribute through the everyday operation of our businesses to resolving proble

40. Slide 40: ESG Management - FY2019 New initiatives

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Basic approach to ESG Management ＜FY2019 New initiatives＞ Environment – Governance – Corporate Governance To conserve and preserve the nature ■April 2019 ■Jun 2019: Established nomin

41. Slide 41: Support for the fight against COVID-19

    Financial Policy & Mid-term Management Plan Financial Report ESG related Capital Policy Progress & Future Initiatives Support for the fight against COVID-19 “STAY HOME” logo and message “we could make it through, as long as we stand together.” This is the slogan we issued back in 1982. Behind this s

42. Slide 42: Memo

    Memo 【Announcement】 We have published our first Integrated Report, Credit Saison Vision and Strategy Report 2020, on March 31 2020. Currently available on our IR website. https://corporate.saisoncard.co.jp/ir/integrated_report/ Copyright © CREDIT SAISON Co.,Ltd All Rights Reserved. 43

43. Slide 43: Comparison of Share for Payment Methods in Japan and the U.S.

    (Reference) Comparison of Share for Payment Methods in Consumer Spending in Japan and the U.S. Japan (FY 2018) U.S.A. (FY2017 → FY2022 forecast) ※ YoY in ( ) ※share forecast of FY2022 in ( ) Pay-Easy Convenience store Prepaid card, other 6.8% (+0.9p) payment 3.8% (FY2022：3.5%) 4.0% (+0.1p) Check 7.5

44. Slide 44: Domestic Market Share (Shopping Transaction Volume)

    (Reference) Domestic Market Share (Shopping Transaction Volume) Aplus, 1.1% Credit Saison Group 13.4% Seven Card Service 1.4% Regional Banks CS(non- FC/BC, Others consolidated) MI Card 1.9% 10.6% 8.4% Affiliated Epos Card 3.3% Companies 5.0% Orico 3.8% Sumitomo Mitsui FG VIEW Card 3.5% 14.3% Toyota

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