Credit Saison Co., Ltd. · TSE:8253
Credit Saison — H1 FY2024 Earnings Presentation
50 slides from Credit Saison's earnings presentation, Nov 14, 2024
Slide 1: Financial Results Briefing for the First Half of FY2024
Financial Results Briefing for the First Half of FY2024 November 14,2024 Credit Saison Co.,Ltd. Tokyo Stock Exchange Prime Market, Securities Code: 8253
Slide 2: Medium-term Management Plan Progress
Medium-term Management Plan Progress
Slide 3: Key Points of Market Interest following the New Medium-Term Plan
Key Points of Market Interest following the Announcement of the New Medium-Term Management Plan Confidence Level in Background to Enhanced Disclosures Strengthening IR Achieving the Targets for Capital Policy Activities of the New Medium-Term Management Plan Targeting 70.0 billion yen share buyback
Slide 4: Strong Start to the New Medium-Term Management Plan
Strong Start to the New Medium-Term Management Plan: Steadily Improving Earnings Power and Upward Revisions to Earnings Forecasts ■Trends in consolidated business profit 100.0 (billion yen) 90.0 2Q (April-September 2024) 77.0 80.0 71.9 Consolidated Business Profit 39.8 40.0 40.0 billion yen YoY Prog
Slide 5: 2Q Financial Results Digest
2Q Financial Results Digest Net revenue ✓ Our three pillars of growth (global business, payment business, and finance business) are the drivers for increased revenue. Business profit ✓ The global business saw steady growth in its lending business, the finance business had expanded profit contributio
Slide 6: Overview of Major Businesses
Overview of Major Businesses Global Business Finance Business Payment Business
Slide 7: Trends in Business Profit in the Global segment
Trands in Business Profit in the Global segment ✓ While the lending business grew due to expansion of the business in India, a business loss was recorded due to valuation losses on investments. (billion yen) 100 10.0 2.8 6.8 Valuation losses in the investment business, etc. 50 5.0 2.4 -0.5 2.1 0 FY2
Slide 8: Credit Saison India: Trends in Profit Contribution
Credit Saison India: Trends in Profit Contribution ✓ Steady progress toward the initial plan ✓ Aiming for healthy and sustainable growth to achieve 20 billion yen by FY26 (the final year of the new medium-term management plan) (billion yen) 50 100 10.0 ～ ～ 5.0 50 2.96 2.44 Approx. 3x 1.64 ～ 1.24 0.9
Slide 9: Credit Saison India: Receivable Balance
Credit Saison India: Receivable Balance ✓ Steady increased centered on direct lending toward the FY24 plan of 300.0 billion yen ✓ Gross non-performing loan ratio (GNPA) is within the plan Approx. Approx. 180.0 billion INR (Unit: billion Indian rupees) 120% 160.0 billion INR 115% Approx. Branch lendi
Slide 10: Credit Saison India: Wholesale & Partnership Lending
Credit Saison India: Wholesale & Partnership Lending ✓ These verticals have contributed to steady growth of Credit Saison India while increasing new partners Wholesale lending Partnership lending Lending to NBFCs and emerging lenders Co-lending with Fintech Approx. ■ Receivable balance ■ Receivable
Slide 11: Credit Saison India: Progress in Direct Lending
Credit Saison India: Progress in Direct Lending Global ✓ Embedded Finance steadily increased its receivables and its partners ✓ Branch Lending increased the number of branches to expand its business Embedded finance エンベデットファイナンス Branch lending Direct consumer lending through integration Direct lendi
Slide 12: Appendix: Risk-Related information
＜Appendix＞Risk-Related information Global ■Credit Saison India’s risk control initiatives ■Guarantee System for Small and Micro Enterprises in India <For consumers> ✓ A guarantee system established by the government to support funding for ✓ Real-time monitoring of receivables trends, and, when overd
Slide 13: Appendix: Governance Structure
＜appendix＞Governance Structure Updated and republish ✓ Strengthen Japan-IHQ support system to support the rapidly expanding CS India business and build a further strong governance system with Mizuho bank Credit Saison ＋ Saison International ＋ Management / Support / Restraint Group management agreeme
Slide 14: Appendix: Organization structure
＜appendix＞Organization structure ✔ Board consists diversified members, including an independent director who retired as an Executive Director from the Reserve Bank of India (India's central bank) Board of Directors ※As of September 30, 2024 Katsumi Masaki Kazutoshi Kosuke Sanjay Arvind Nanda Sameer
Slide 15: Overview of Major Businesses
Overview of Major Businesses Global Business Finance Business Payment Business
Slide 16: Expanding Profits and Enhancing Competitiveness
2Q (April-September 2024) Expanding Profits and Finance Business profit: 17.2billion yen Enhancing Competitiveness YoY Progress rate through Group Businesses 141％ 55％ (billion yen) 31.5 28.2 17.2 12.2 *Suruga Bank FY23-2Q FY23 FY24-2Q FY24 (planned) 16
Slide 17: Credit Saison x Saison Fundex: Guarantee Business
Credit Saison x Saison Fundex Towards expansion of off-bs ratio [Guarantee business] *Off-BS ratio for the Finance Business FY21 FY24-2Q FY26 plan Off-BS Off-BS Off-BS ■Trends in guarantee balance Approx. Approx. Approx. (billion yen) 30％ 40％ 45％ 800.0 8,000 Leveraging our strength in handling long-
Slide 18: Credit Saison x Saison Fundex: Real Estate Finance Business
Credit Saison × Saison Fundex [Real Estate Finance Business] ■Trends in receivables balance (billion yen) 1,200.0 12,000 Leasebacks PJ loans ✓A product lineup that meets a wide variety of needs and a flexible screening system, Steady growth in outstanding balance due Mortgage- backed to promotion ef
Slide 19: Credit Saison x Suruga Bank Neo Finance Solution Company
Credit Saison × Suruga Bank Neo Finance ■Finance field / new loan amounts FY24-27 plan Solution Company *Total of collaboration loans and housing loans 80.0-85.0 (billion yen) billion yen/year 1,000 100.0 × Non-Bank Bank 10.0 ■Expanding products in the finance field 700 70.0 ✓ Housing loan guarantee
Slide 20: Overview of Major Businesses
Overview of Major Businesses Global Business Finance Business Payment Business
Slide 21: Structural Reforms in the Payment Business
Overcoming Interest Rate Increases and Achieving Sustainable Growth 2Q (April-September 2024) Structural Reforms in the Payment Business Payment Business Profit: 13.6 billion yen YoY Progress rate 135％ 50％ 27.5 Premium Strategy (billion yen) 20.5 to increase earning power 19.2 13.6 Foundation that s
Slide 22: Key Indicators
Key Indicators ■ Shopping transaction volume ■Card shopping revolving balance Improving Profitability through Our (trillion yen) (billion yen) Premium Strategy 前年比 YoY 112% 01.Expanding the share of high-unit-price, 108% 108% 105% 105% 107% 111% 110% 107% 108% high-utilization customers Comparison o
Slide 23: Establishment of a Stable Member Base
Establishment of a Stable Member Base Expanding the premium membership base through rank advancement Improved ✓ Invitation appeals to high-utilizing customers ・Analyze targets for rank-up appeals using the Saison Data Platform profitability (CSDX) and measure the effectiveness of early engagement em
Slide 24: Alliance Strategies to Achieve Premium Strategy
Alliance Strategies to Achieve Premium Strategy A diverse network of alliances made possible by our status as an independent non-bank New Alliance Strategy Deepen initiatives with existing business partners Targeting digital services with growth potential, Creating multiple monetization points again
Slide 25: Progress on Initiatives to Improve Profitability
Progress on Initiatives to Improve Profitability Expanding asset revenue Diversifying revenue sources We are promoting the design of Increase revolving fee rates appropriate fees that match the services ✓ Customer notifications started in August 2024 Improve provided, while also closely monitoring T
Slide 26: A Foundation that Supports Structural Reforms
A Foundation that Supports Structural Reforms DX and AI to save manpower in operations Improving profit margins by and improve customer convenience streamlining operations August 2024 release of AI- ✓ Reduce/eliminate powered credit card screenings in unprofitable operations as little as 0 seconds ✓
Slide 27: Capital Policy Progress
Capital Policy Progress
Slide 28: Progress on Capital Policy
Progress on Capital Policy Details Announced in the New Medium-Term Management Plan Progress in 1H in May 2024 Share Buybacks Cumulative Acquisition of Treasury Shares Planned 70.0 billion yen of share (1) Total number of shares acquired: buybacks in the new medium-term 7,110,600 shares (progress ra
Slide 29: Human Capital・CSDX
Human Capital・CSDX
Slide 30: Initiatives to Improve Corporate Value
Initiatives to Improve Corporate Value Creating a culture in which all employees Human resources development to achieve are conscious of Credit Saison’s business the new medium-term plan strategy results and stock price Developing specialists Settlement bonus system ✓ Support for acquiring qualifica
Slide 31: CSDX Initiatives
CSDX Initiatives Creating Digital Human Resources Complete Digitalization of Business Processes Dedicated digital human resources Systems Development for business divisions ✓ Digitalization of screening and reception Business reduction hours ✓ Employees who have learned DataSpider and Tableau have b
Slide 32: SAISON AI Generative AI Initiatives
SAISON AI In-house production generated AI tools Generative AI Initiatives In-house ChatGPT “SAISON ASSIST” ✓ Interactive function with AI assistant that can be used to summarize Round 2 sentences, plan ideas, etc. ✓ Increasingly popular and used more than 20,000 times per month Generative AI does t
Slide 33: FY2024 2Q Financial Results Summary
FY2024 2Q Financial Results Summary
Slide 34: Financial Summary
Financial summary （￥100 Million） Difference FY23 FY24 FY24plan FY24plan Progress YOY from initial 2Q 2Q （initial） （revised） plan rate Consolidated Net revenue 1,751 1,963 112.1% 4,130 4,160 30 47.2% Business profit 398 400 100.5% 770 800 30 50.0% Profit attributable to owners of parent 440 284 64.6%
Slide 35: Overview of Business Results by Segment: Net revenue
Overview of Business Results by Segment （￥100 Million） Net revenue FY23 FY24 YoY FY24plan FY24plan Difference from initial Progress 2Q 2Q （initial） （revised） plan rate Payment 1,149 1,212 105.5% 2,499 2,529 30 48.0% Lease 62 65 104.9% 135 135 － 48.6% Finance 285 325 114.1% 633 633 － 51.5% Real estat
Slide 36: Overview of Business Results by Segment: Segment profit
Overview of Business Results by Segment （￥100 Million） Segment profit Difference FY23 FY24 FY24plan FY24plan Progress or loss (Business YoY from initial 2Q 2Q （initial） （revised） plan rate profit or loss) Payment 101 136 134.9% 205 275 70 49.7% Lease 23 21 92.8% 40 40 － 54.2% Finance 122 172 140.9%
Slide 37: Contribution by Consolidated Companies
Contribution by Consolidated Companies ■Business profit Difference (￥100 Million) Consolidated Non-consolidated Difference Business profit Ordinary Profit FY24-2Q 400.0 253.4 146.6 (Year-on-year difference) 1.9 17.7 ▲15.8 ■Contribution by Consolidated Companies (￥100 Million) Contribution Year-on- t
Slide 38: Credit Risk
Credit Risk ✓ Partial reversal of the special allowance set aside for future increases in delinquent loans in the COVID-19 pandemic ✓ Build predictive models using AI and DX, and enhance counseling for developing credit (limit control) and delinquencies when they occur Delinquency over 90 days(non-c
Slide 39: Interest Repayment Claims
Interest Repayment Claims FY23 Additional allocation for the Level of provision adequate at future Monitoring future trends present consolidated and non-consolidated: 2.3 billion yen ■No. of new claims and price per claim (monthly average) ■Balance of provision for loss on interest repayment No. of
Slide 40: Financial Policy
Financial Policy ■Sound financial base ■Structure of interest-bearing debt • Credit Rating R&I A+ • Almost 70% of the interest-bearing debt is composed of long-term funds • Issuance of 20 years bonds, first in card companies • Fixed interest rate procurement accounts for about 70% June 2017 10 billi
Slide 41: Main Increases/Decreases in Business Profit
41 （￥100 Million） FY24-2Q results 253 実績 Increased non- ■Ordinary profit (non-consolidated) -2 ＜appendix＞Main Increases/Decreases in business profit operating income Increased -22 financial expenses (consolidated), ordinary profit (non-consolidated) -10 Increased credit costs Increased other -34 ope
Slide 42: New Medium-Term Management Plan (FY2024-2026)
New Medium-Term Management Plan (FY2024-2026)
Slide 43: Goals and Priority Themes
New Medium-Term Management Plan (FY2024-2026) Goals and Priority Themes Republish BY FY2030: New Medium-Term Management Plan (FY2024-2026) GLOBAL NEO FINANCE Business profit of COMPANY 100.0 billion yen and ROE of 9.5% Improving corporate value PBR of 1, and market capitalization of 1 trillion yen P
Slide 44: Management Conscious of Capital Costs and Stock Prices
Concepts for Realizing Management that is Republish Conscious of Capital Costs and Stock Prices Improve profitability Consolidated business profit of 100.0 billion yen ROA Increase asset efficiency Reduction equivalent to 70% of cross- ROE↑ shareholdings Utilize interest-bearing debt 9.5％ Financial
Slide 45: Financial Strategy
Financial Strategy Republish Medium-term consolidated financing strategy "Maintain financial stability" and "pursue a balance in financing costs" Productivity Growth 01. Maintain and improve R&I ratings, Maximize and obtain multiple ratings 02. Stability (reduce liquidity and Corporate Value interes
Slide 46: Cash Allocation
Cash Allocation Republish Concept for New Medium-Term Basic Policy Plan (FY2024-2026) ✓ Strengthen investments for continued growth ✓ Strengthen "earning power" through growth investments ✓ Promote structural reforms to increase capital efficiency ✓ Improve "earning power" for existing businesses ✓
Slide 47: Business Profit Trend Plans by Segment
Update and Business Profit Trend Plans by Segment republish (billion yen) FY23 FY24plan FY24plan FY25 FY26 FY23 & FY26 (a) (initial) (revised) plan plan (b) plan diff. (b-a) Payment 19.2 20.5 27.5(+7.0) 24.3 28.9 +9.7 Strengthen revenue base via member structure reform, and business reform via DX・AI
Slide 48: Disclaimer
Disclaimer 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 unknown risks, uncertainties and other factors that may cause our actual results, performance, achievements or fi
Slide 49: ESG/External Evaluations
ESG/External Evaluations (an example） First selection in 2024 ESG index used by GPIF based on companies' disclosure of environmental ESG index adopted by the GPIF consisting of A new stock index comprised of "companies that are information and carbon Japanese companies that excel in ESG responses in
Slide 50: Appendix: Composition of Main Businesses
<Appendix> Composition of Main Businesses Segment Global business Finance business Payment business ■Lending ■Credit guarantees Lending that is mainly targeted at Free loans and housing loans, etc. ■Credit cards Business underserved customers ■Asset formation loans ■Processing content ■Investment In