Aeon Financial Service Co., Ltd. · TSE:8570
Aeon Financial Service — FY2020 Earnings Presentation
33 slides from Aeon Financial Service's earnings presentation, Apr 9, 2021
Slide 1: FY2020 IR Presentation Material
FY2020 IR Presentation Material April 9, 2021 AEON Financial Service Co., Ltd.
Slide 2: Key points of the announcement of this financial results
Key points of the announcement of this financial results Q4 Earnings Summary ➢Consolidated financial results for the full year were increased revenue and decreased profit. ➢Total operating receivables increased from the beginning of the fiscal year, mainly for domestic housing loans and auto loans.
Slide 3: Agenda and period of consolidated results
1. Consolidated results by segments 2. Consolidated results by area 3. Overview of the new medium-term management plan 4. FY2021 earnings forecasts 【Period of consolidated results in financial statements for the previous fiscal year】 Due to changes in the fiscal year (from the end of March to the en
Slide 4: Consolidated results by segments - Deviations from company forecasts
1. Consolidated results by segments - Deviations from company forecasts 【Factors that diverge between forecasts and actual results】 ＜4Q assumptions at the time of forecast announcement＞ ＜Actual 4Q situation＞ ・ In major countries such as Japan, Thailand, and Malaysia, ・ Restrictions on activities may
Slide 5: Main initiatives (Domestic)
1. Consolidated results by segments - Main initiatives (Domestic) ■Develop face-to-face and non-face-to-face channels to meet consultation and application needs ■Promotion of cashless payments by promoting the spread of touch payments Anti-epidemic Online Self-consultation booth measures consultatio
Slide 6: Main initiatives (Global)
1. Consolidated results by segments - Main initiatives (Global) ■Promotion of service offering centered on smartphone apps ■Strengthen cooperation with local AEON Group retailers and leading external companies Strengthen collaboration with Online service-delivering channels companies inside and outs
Slide 7: Consolidated results by segments - Full-year results
(Unit：Billions of yen） 1. Consolidated results by segments - Full-year results Domestic Global Consol. (Unit：Billions of yen） Total Retail Solution Total Total Mekong ※1 ※2 ※2 ※1 ※3 China Area Area Malay Area Operating Revenue 350.9 230.2 182.7 137.1 15.5 73.8 47.6 487.3 YoY 116％ 124％ 101％ 89％ 82％ 8
Slide 8: Quarterly Performance trends (Domestic and Global)
1. Consolidated results by segments - Quarterly Performance trends (Domestic and Global) ■In Domestic, revenue excluding the impact of consolidation of insurance companies increased from the second quarter onwards. ■In Global, control of bad debt-related expenses by managing deferred repayment claim
Slide 9: Factors contributing to increase or decrease in profit by area
1. Consolidated results by segments - Factors contributing to increase or decrease in profit by area ■Both domestic and international efforts were made to control costs, and the previous forecast was raised. Operating profit Domestic Global Operating profit ▲¥9.8bn ▲¥14.7bn Operating Operating reven
Slide 10: Consolidated results by area
2. Consolidated results by area ■Affected by the corona disaster, the decline in the amount outstanding of receivables in Global business has been on a recovery trend. Q4 Comulative Q4 Balance of (unit：billion yen） Transaction YoY Transaction YoY operating Increase or (Compared to (Compared to decre
Slide 11: Credit Card Shopping Volume Trends (Domestic)
2. Consolidated results by area - Credit Card Shopping Volume Trends (Domestic) ■ Credit card purchase: During the period of the declaration of a state of emergency, consumption in particular shrank. ■ Cash advance: There are effects such as shrinking demand for funds and special cash Relaxation of
Slide 12: Domestic - Trends in transactions and outstanding receivables
Domestic - Trends in various transactions and outstanding receivables of main products ■ Card shopping volumes were on a recovery trend. ■ Housing loans volumes remained strong and firmly accumulated the outstanding of receivables. ※Revolving payment installment Credit card purchase receivables outs
Slide 13: Global - Trends in transactions and outstanding receivables
Global - Trends in various transactions and outstanding receivables of main products ■ Along with the recovery in economic activity, sales of goods (credit card purchase, installment finance) improved. ■ Loans were temporarily revised to stricter examination standards, and the decline in loan balanc
Slide 14: Trends in finance receivables (Global)
2. Consolidated results by area - Trends in finance receivables (Global) ■ Mainly in the first quarter, expenses related to bad debts in preparation for future risks increased, including deferred repayment receivables. ■ Since the Q3, the collection of deferred repayment receivables in Thailand, Mal
Slide 15: Summary of the medium-term management plan <FY2021-2025>
Summary of the medium-term management plan <FY2021-2025> AEON Financial Service Co., Ltd.
Slide 16: Current state of the AFS Group's service
Current state of the AFS Group’s service ■ Structure in which each company individually provides optimal services to customers and maximizes profits based on its own, independent management policies Customer Credit card Bank Insurance Hire purchase counter counter counter counter WEB WEB WEB WEB Tou
Slide 17: Our vision for the medium-term
Our vision for the medium-term Customer’s life stage Anytime, anywhere, safe, secure, convenient and money-saving Touch Customer point Counter WEB App service Common ID Food, Lifestyle clothing Health Enter- Tele- Education Trans- Public and tainment communi- portation Service service housing cation
Slide 18: Second founding
Policy of medium-term management plan Second founding Value chain transformation and new network creation Build an eco-system (marketplace) by connecting the services of the AEON Group and its partners with financial services such as payment and point systems New Finance service Finance Finance Fina
Slide 19: Priority measures
Priority measures Domestic (1) Creating infrastructures for the AEON living zone (2) Incorporating the needs of local communities and customers (3) Improving risk control and cost control capabilities Global (1) Realizing digital financial inclusion in each country (2) Expanding the business, produc
Slide 20: Priority measures (domestic)
Priority measures (domestic) Group cashless operation - Standardization of the Group’s ID - Promotion of the AEON card as the main card to customers Creating Creation of a payment network in each region infrastructures for - Expansion to merchants inside and outside the Group the AEON living zone Cr
Slide 21: Priority measures (global)
Priority measures (global) Customer base expansion with digital finance inclusion Realizing digital - Migration of interface to mobile apps in each country financial inclusion in - Establishment of screening methods through the utilization of data and AI, and reducing bad debt allowance each country
Slide 22: Main numerical targets
Main numerical targets (Unit:Billions of yen) FY2019 FY2020 FY2025 (Actual) (Actual) (Target) Operating Revenue 457.3 487.3 760.0 Operating Profit 65.0 40.6 100.0 Operating Profit Ratio 55％：45％ 53％：47％ 40％：60％ domestic : global AEON Financial Service Co., Ltd.
Slide 23: Milestone
Milestone Develop the infrastructure in the transformation phase in order to reach the profit expansion phase Priority investment period ID acquisition, app development, and insurance FY2021-2022 FY2023-2025 <Transformation phase> <Profit expansion phase> AEON Financial Service Co., Ltd.
Slide 24: FY2021 earnings forecasts
FY2021 earnings forecasts AEON Financial Service Co., Ltd.
Slide 25: FY2021 earnings forecasts - Policy
4. FY2021 earnings forecasts - Policy 【Domestic】 Initiatives for Common Group IDs ・Build a group loyalty program to share customer base ・Fusion of Financial Services and Daily Life Services ・Promoting cashless activities through a group 【Domestic】 Expansion of cross-selling ・Creditor group insurance
Slide 26: FY2021 Consolidated forecasts
FY2021 Consolidated forecasts (Yen) Full term YoY Operating revenue 490.0 – 520.0 bn 101 – 107 ％ Operating profit 41.0 – 46.0 bn 101 – 113 ％ Profit attributable to owners of parent 19.0 – 21.0 bn 107 - 119 ％ （EPS） ( 88.04 – 97.31 ) ( +6.05 – +15.32 ) Interim Year End Full Year Payout ratio Forecast
Slide 27: Business performance excluding the impact of consolidation of insurance companies
(Reference) Business performance excluding the impact of consolidation of insurance companies ■ P/L was consolidated from the second quarter of this 【Figures for the impact（Domestic Business)】 fiscal year due to the consolidation of insurance companies. (Unit：Billions of Cumulati Q1 Q2 Q3 Q4 （Figure
Slide 28: Consolidated balance sheet
(Reference) Consolidated balance sheet Consolidated results Change from Topics ※（）:Change from start of FY Results （Unit：Billions of yen） start of FY ・Domestic balance：¥653.1bn (-¥62.9bn) *including holding company Cash and deposits 705.7 △57.1 → Increase in outstanding mortgage receivables due to s
Slide 29: Allowance for Doubtful Accounts and Allowance for 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 FY2019 FY2020 Allowance for doubtful accounts, balance at be
Slide 30: Domestic Card Shopping Volume Trends
(Reference) Domestic Card Shopping Volume Trends ■ Life-related industries performed well. On the other hand, industries that have a large impact on self-restraint are sluggish. Year-on-year change in volume by industry and business type Food supermarkets, Mail-order shopping Furniture, Strong indus
Slide 31: FY2020 Results (Hong Kong, Thailand, Malaysia)
(Reference) FY2020 Results (Hong Kong, Thailand, Malaysia) FY2019 Q4 FY2020 Q4 Results YoY Results YoY AEON Revenue 1,297,686 98％ １,089,858 84％ CREDIT SERVICE Profit before tax 444,930 85％ 357,946 80％ (ASIA) (HK$’000) Profit for the period 370,083 85％ 301,575 81％ AEON Total Revenues 23,300,952 113％
Slide 32: FY2020 Results (Hong Kong, Thailand, Malaysia)
(Reference) FY2020 Results (Hong Kong, Thailand, Malaysia) ■ Consolidated Results of AEON Credit Service (Asia) Co., Ltd. (Unit:Billions of yen) FY2019 FY2020 Results Results YoY Exchange rates: HKD 1 ・FY2019 ：¥13.96 Operating income 18.1 14.9 82% ・FY2020 ：¥13.68 Operating profit 6.2 4.8 79% Fiscal
Slide 33: Forward-looking statements
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 — FY2020 Earnings Presentation on 6ix