Credit Saison Co., Ltd. · TSE:8253

Credit Saison — H1 FY2020 Earnings Presentation

35 slides from Credit Saison's earnings presentation, Nov 13, 2020

1. Slide 1: Financial Results of First Half of FY2020

   Financial Results of First Half of FY2020 November 13, 2020 Credit Saison Co., Ltd. Copyright © CREDIT SAISON Co.,Ltd All Rights Reserved.

2. Slide 2: Agenda

   AGENDA ◆ Financial Results of FY2020 1H / Financial Policy & Capital Policy Managing Executive Officer, Shingo Baba Head of Corporate Planning Dept., Corporate Risk Management Dept., Treasury & Accounting Dept. ◆ Business Strategy for FY2020 2H Representative, Executive President and COO Masahiro Ya

3. Slide 3: Financial Results of FY2020 1H / Financial Policy & Capital Policy

   ◆Financial Results of FY2020 1H / Financial Policy & Capital Policy ・Financial Results of FY2020 1H P.4-P.9 ・Financial Policy & Capital Policy P.10-P.12 Copyright © CREDIT SAISON Co.,Ltd All Rights Reserved. 3

4. Slide 4: Financial Results – Results by Business Segment (IFRS)

   Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Financial Results ～ Results by Business Segment(IFRS) (billion yen) (billion yen) 180.0 <Net revenue> <Business profit > 159.2 35.0 -12% 31.2 28.7 150.0 140.3 30.0 -8% -0.8 （ - ） 4.6 1.5 3.4 （-45%） 11.0 2.

5. Slide 5: Contribution by consolidated companies (IFRS)

   Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Contribution by consolidated companies(IFRS) ※( ) =Year-on-year difference Non-consolidated Consolidated Difference Ordinary income Business profit ¥21.5billion（＋¥1.58billion） ¥28.7billion（-¥2.49billion） ¥

6. Slide 6: Main Indices (Non-consolidated)

   Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Main Indices (Non-consolidated) New cards issued Total cardholders Active cardholders Usage rate 0.57 billion 2 5 . 9 5 million 1 4 . 5 3 million 56.0% （-38% YoY） （-0.44 millionfrom （-0.43 millionfrom （-0.

7. Slide 7: Credit Risk

   Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Credit Risk Despite the COVID-19 pandemic, Credit Saison has maintained its rate of delinquency over 90 days at a low level. Moreover, bad-debt cost is declining more sharply than expected at the start of

8. Slide 8: Interest Repayment Claims and provision balance

   Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Interest Repayment Claims Additional provisions of ¥11.1 billion The Company has no plans for on a consolidated basis and ¥10.7 The Company currently has a additional provisions in the current billion on a

9. Slide 9: Revised Business Results Forecast

   Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Revised Business Results Forecast In FY2020 2H Credit Saison plans to invest in card issuance and expansion of services with a view to acquiring future revenue streams. The Company forecasts an increase in

10. Slide 10: Financial Policy (Structure of Interest-bearing Debt)

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Financial Policy (Structure of Interest-bearing Debt) Regarding structure of interest-bearing debt [Credit Rating] • Over 70% of the interest-bearing debt is composed of long-term funds such as long R&I A+

11. Slide 11: Capital Policy (Shareholder Returns & Management Indicators)

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Capital Policy(Shareholder Returns & Management Indicators) Maintaining and improving financial soundness as a priority, aiming to improve asset efficiency by realizing sustainable growth through strategic

12. Slide 12: Capital Policy (Risk Capital Management)

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Capital policy (Risk capital management) • ALM management is introduced to measure risk and allocate risk capital for each business • Profit & loss fluctuation risks are measured by aiming at a confidence

13. Slide 13: Business Strategy for FY2020 2H

    ◆ Business Strategy for FY2020 2H ・ Business Strategy for FY2020 2H P.13-P.31 Copyright © CREDIT SAISON Co.,Ltd All Rights Reserved. 13

14. Slide 14: Forecast of Personal Consumption and the Real Estate Market

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Forecast of Personal Consumption and the Real Estate Market as They Affect Our Two Key Businesses, the Payment Business and the Finance Business, and Key Points on How the Company Should Respond Forecast o

15. Slide 15: Two Key Actions in 2H

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Two Key Actions in 2H Providing house card functions integrated with affiliated partners’ customers strategies, Payment and expand customer base through settlement services Finance BtoC field Finance Busin

16. Slide 16: Target Orientation for Credit Saison (1)

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Business Strategy for FY2020 2H : Target Orientation for Credit Saison (1) BtoC field Delivery of new payment services by building Attracting the young, female a completely smartphone-based platform Enhanc

17. Slide 17: Target Orientation for Credit Saison (2)

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Business Strategy for FY2020 2H : Target Orientation for Credit Saison (2) Orientation The American Express Card has a high customer satisfaction index, so Credit Saison will use it as a strategic tool to

18. Slide 18: Medium-Term Management Plan (FY2019 – FY2021)

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related 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. Expanding the earnings ba

19. Slide 19: Growth Strategies in the Payment Business: Young, Female and Affluent Segments

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Ⅰ. Growth Strategies and Structural Reform in the Payment Business 1-1. BtoC field: Attracting the young, female and affluent market segments through delivery of new products: Orientation of product develo

20. Slide 20: Product Releases in 1H

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Ⅰ. Growth Strategies and Structural Reform in the Payment Business 1-2. BtoC field: Attracting the young, female and affluent market segments through delivery of new products: Product releases in 1H 2020 ●

21. Slide 21: Overview of Product Releases in 2H

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Ⅰ. Growth Strategies and Structural Reform in the Payment Business 1-3. BtoC field: Attracting the young, female and affluent market segments through delivery of new products: Overview of product releases

22. Slide 22: Product Releases in 2H: Affluent Segment

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Ⅰ. Growth Strategies and Structural Reform in the Payment Business 1-4. BtoC field: Attracting the young, female and affluent market segments through delivery of new products: Overview of product releases

23. Slide 23: Progress with New Processing Partners

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Ⅰ. Growth Strategies and Structural Reform in the Payment Business 1-5. BtoC field: Attracting the young, female and affluent market segments through delivery of new products: Progress with new processing

24. Slide 24: BtoB Field: Cashless Payments in the SME Market

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Ⅰ. Growth Strategies and Structural Reform in the Payment Business 2. BtoB field: Promoting cashless payments in the BtoB field by expanding sales in the SME market ・ Continue strengthening of sales in the

25. Slide 25: Expansion of New Services in Balance Products

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Ⅰ. Growth Strategies and Structural Reform in the Payment Business 3. Expansion of new services in balance products and improvement of profitability As shopping and cashing transaction volumes have shrunk

26. Slide 26: Measures in Payment Business: Conclusion

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Ⅰ. Growth Strategies and Structural Reform in the Payment Business 4. Measures in payment business: Conclusion ・ BtoC field: Attracting the young, female and affluent market segments through delivery of Or

27. Slide 27: Further Expansion of Finance Business

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Ⅱ. Further expansion of Finance Business – Strengthening relationships with partners and expand new alliances Credit Saison will diversify its revenue sources by providing financing features tailored to ma

28. Slide 28: Finance Business: Flat 35 Loans and Rent Guarantees

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Ⅱ. Further expansion of Finance Business – Strengthening relationships with partners and expand new alliances Market share of Flat 35 Loans Flat 35 Loans Rent Guarantees In just over 10 years since it bega

29. Slide 29: Expanding the Earnings Base of Global Business

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Ⅲ. Expanding the earnings base of global business toward future Transition from “sowing” to “harvesting” stage in operation countries Contributing to regional economic development by achieving financial in

30. Slide 30: Global Business: Operations by Country

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related 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-license application pro

31. Slide 31: Status of COVID-19 in Major Operation Countries

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related Ⅲ. Expanding the earnings base of global business toward future Transition from “sowing” to “harvesting” stage in operation countries Status of the COVID-19 Pandemic in Major Operation Countries ・ In Vietn

32. Slide 32: ESG related

    ◆ ESG related Copyright © CREDIT SAISON Co.,Ltd All Rights Reserved. 32

33. Slide 33: Basic Approach to ESG Management

    Financial Policy & Business Strategy for Financial Report Capital Policy FY2020 2H ESG related 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 problems and move society for

34. Slide 34: Comparison of Share for Payment Methods in Consumer Spending

    (Reference) Comparison of Share for Payment Methods in Consumer Spending in Japan and the U.S. Japan (FY 2019) U.S.A. (FY2018 → FY2023 forecast) ※ YoY in ( ) ※share forecast of FY2023 in ( ) Convenience store Prepaid card, other Pay-Easy payment 3.6％ （FY2023：3.4％） 7.6％(＋0.8p) 4.1％(＋0.1p) Check 5.5％

35. Slide 35: Domestic Market Share (Shopping Transaction Volume)

    (Reference) Domestic Market Share (Shopping Transaction Volume) Crdit Saison Group 12.2％ CS(non- Apuls 1.0% consolidated) Seven Card service 1.3% Regional Banks 7.7% Affiliated FC/BC, Others MI Card 1.7% Companies 13.6% 4.5% Epos Card 3.4% Sumitomo Mitsui FG orico 3.8% 12.6% VIEW Card3.3% Mitsubishi

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