Aeon Financial Service Co., Ltd. · TSE:8570
Aeon Financial Service — Investor Presentation (April 2022)
45 slides from Aeon Financial Service's investor presentation, Apr 7, 2022
Slide 1: FY2021 IR Presentation Materials
FY2021 IR Presentation Materials 7 April, 2022 AEON Financial Service Co., Ltd. Stock Listing: Tokyo Stock Exchange, Prime Market AEON Financial Service Co., Ltd. Code No: 8570
Slide 2: Contents
Contents 1. Financial Highlights 2. Impact of the application of the Accounting Standard on Revenue Recognition 3. Covid-19 situation 4. Medium-Term Management Plan Policy and Key Measures 5. Creation of AEON Living Zone 6. Outlook for Transaction Volume and Receivables Balance 7. Transforming busin
Slide 3: Financial Highlights (Consolidated results)
1. Financial Highlights・Financial Highlights (Consolidated results ) The highlights of the consolidated results ・In FY2021, excluding consolidated effects on insurance revenues and profits, increased in revenue and profits. ・Although the recovery in the outstanding balance of receivables was sluggis
Slide 4: Financial Highlights (Consolidated results)
1. Financial Highlights・Financial Highlights (Consolidated results ) The highlights of the consolidated results ・In Domestic, operating revenue increased significantly due to the effects of controlling expenses, reflecting the increase in profits from the sale of securitization and investment effect
Slide 5: Annual Trends in Domestic Business
1. Financial Highlights・Performance by Business Annual Trends in Domestic Business ・In Domestic, although loans and installment income decreased due to sluggish growth in the amount outstanding of receivables, positive due to gains on sales of receivables. ・Point promotion costs, system-related expe
Slide 6: Annual Trends in Global Business
1. Financial Highlights・Performance by Business Annual Trends in Global Business ・In Global, despite a decrease in loan revenues such as cash advance and loans, profits increased significantly due to cost reductions, mainly bad debt-related expenses. (billion Operating China Mekong Malay Operating y
Slide 7: Receivables balance, NPL ratio (Global business)
1. Financial Highlights・Performance by Business Receivables balance, NPL ratio (Global business) ・In each area, the accumulation of operating loans and installment receivables continued, and the balance of receivables recovered to the same level as before covid-19 started spreading. ・Strive to furth
Slide 8: Impact of the application of the Accounting Standard on Revenue Recognition
２. Impact of the application of the Accounting Standard on Revenue Recognition・Consolidation impact Impact of the application of the Accounting Standard on Revenue Recognition ・Started applying the Accounting Standard for Revenue Recognition in the Q1 of FY2022. ・Some operating revenues and expenses
Slide 9: Impact of the application of the Accounting Standard on Revenue Recognition
２. Impact of the application of the Accounting Standard on Revenue Recognition・Impact by Business Impact of the application of the Accounting Standard on Revenue Recognition ・Calculated in FY2021 results, the impact of ¥29.7 bn in domestic card shopping revenue and ¥2.3bn in domestic e-money revenue
Slide 10: Spread of infection and restrictions on activity in the operating countries
3. Covid-19 situation ・Operating countries situation Spread of infection and restrictions on activity in the operating countries Period 感染拡大時期：of Activity 活動制限： Q4： Status of FY2021 Q4 3monts pandemic restrictions Months 【HK, TH, MY（Dec -Feb)】 Operating Due to the epidemic of Omicron variants, count
Slide 11: Medium-Term Management Plan Policy and Key Measures
業績ハイライト・概要 第3四半期以降の取り組み Medium-Term Management Plan Policy and Key Measures AEON Financial Service Co., Ltd.
Slide 12: Second founding: Value chain innovation and network creation
４. Medium-Term Management Plan Policy and Key Measures・Medium-Term Management Plan Second founding Value chain innovation and network creation Domestic business ① Building infrastructure for the construction of AEON Living Zone ② Incorporating the needs of local communities and customers' living inf
Slide 13: Changes in the environment surrounding us
４. Medium-Term Management Plan Policy and Key Measures・Medium-Term Management Plan Changes in the environment surrounding us ・Recently, customers' awareness of their life defense has been increasing due to the rise in global prices. ・In response to changes in the external environment, revised the bu
Slide 14: Creation of AEON Living Zone and Transformation of Business Model
４. Medium-Term Management Plan Policy and Key Measures・Medium-Term Management Plan Creation of AEON Living Zone and Transformation of Business Model ・Contribute to the improvement of quality of life by enhancing the value provided to customers and the construction of a "richer and more secure societ
Slide 15: Creation of AEON Living Area using WAON POINT
5. Creation of AEON Living Zone ・Utilizing WAON POINT Creation of AEON Living Area using WAON POINT WAON POINT WAON POINT granted External New accumulates further as a benefit by credit merchant enrollment by the use of external card enrollment stores merchant stores AEON Living Zone WAON POINT AEON
Slide 16: WAON POINT – ID expansion
5. Creation of AEON Living Zone ・Utilizing WAON POINT WAON POINT –ID expansion ・The cumulative number of Cash WAON POINT cards issued is about 30 million, and the e-money WAON is about 50 million. The potential for AEON Card members to be acquired is high. ・Promote AEON Card membership through aware
Slide 17: Effects of WAON POINT and AEON Pay
5. Creation of AEON Living Zone ・WAON POINT and AEON Pay Effects of WAON POINT and AEON Pay ・AEON Card members promote the use of points by improving the attractiveness of WAON POINT by changing the point system. ・Increased awareness of the convenience of points and contributes to an increase in the
Slide 18: Recruitment of members using WAON POINT
5. Creation of AEON Living Zone ・ID expansion Recruitment of members using WAON POINT ・AEON Card membership plan using WAON POINT is carried out at any time. (in the case of web application, further points are added) ・Responding to the reduction of the age of adulthood (18 years old and over does no
Slide 19: Promotion of the use of AEON cards using WAON POINT
5. Creation of AEON Living Zone ・Promotion of use Promotion of the use of AEON cards using WAON POINT Use of living infrastructure, EC and online SM Support payment leveling and funding demand ・In line with the new life season, implemented a plan ・Implementation of a campaign to promote use of to pr
Slide 20: Cross-sell promotion using WAON POINT
5. Creation of AEON Living Zone ・Cross-selling Cross-sell promotion using WAON POINT WAON POINT×installment sales finance WAON POINT×Asset Management Products ・AEON Product Finance provides new and renovated ・WAON Points awarded by applying for AEON Bank’s decarbonized housing and electric vehicle T
Slide 21: Expansion of use locations of WAON POINT and AEON Pay
5. Creation of AEON Living Zone ・Use Locations Expansion of use locations of WAON POINT and AEON Pay ・In Sep 2021, WAON POINT and AEON Pay were introduced mainly by major companies of AEON Group. ・In March 2022, AEON Pay was started at 99 Round One stores in Japan as the first external member store
Slide 22: Domestic credit card shopping and cash advances
6. Outlook for Transaction Volume and Receivables Balance ・Domestic Business Domestic credit card shopping and cash advances ・In Domestic, the use of credit revolving and cash advance is expected to increase as people move. ・Credit card shopping volumes hit record highs and cash advance volumes are
Slide 23: Global Transaction Volume and Receivables Balance
6. Outlook for Transaction Volume and Receivables Balance ・Global Business Global Transaction Volume and Receivables Balance ・Covis-19 infections will not converge in Asia, but activities are expected to become more active toward economic normalization. ・In all areas, both volumes and receivables ar
Slide 24: Transforming business models: DX, Health & Wellness, ESG
7. Transforming business models・Three Pillars Transforming business models Sustainable DX Management ・Changes in the lives and DX behavior of customers ・Transforming and streamlining business models Health & Wellness ・ Increase in health awareness and promote behavioral changes ・ Increase healthy ex
Slide 25: DX① Digital business model transformation: Digital Bank
7. Transforming business models・ AFS × DX DX① -Digital business model transformation ・First Japanese company in Malaysia to apply for a digital bank license. ・MoneyLion as technology partner to open digital bank. ・MoneyLion has been a digital AFS ACS Malaysia platformer providing retail Screening an
Slide 26: DX① Digital business model transformation (Malaysia Business)
7. Transforming business models・ AFS × DX DX① -Digital business model transformation (Malaysia Business) ・Improved accessibility expands customer base from unbanked to wealthy, young to elderly. ・Proposing and providing optimal financial products in line with changes in customers' lifestyles. Age 10
Slide 27: DX② Digital business model transformation (Global Business)
7. Transforming business models・ AFS × DX DX② -Digital business model transformation (Global Business) ・Transform business processes to improve the customer experience. Thana SinSap Initiatives Improving Cost efficiency customer convenience AEON THAI MOBILE App Changes in cost reductions (FY2021) ・V
Slide 28: DX② Digital business model transformation (Domestic Business)
7. Transforming business models・ AFS × DX DX② -Digital business model transformation (Domestic Business) ・AEON Credit Service acquired DX Transformation Certification as established by the METI on April 1, 2022. ・In the AEON Living Zone, we will build DX infrastructure in the fields of app-based ser
Slide 29: Health & Wellness
7. Transforming business models・ AFS × Health & Wellness Health & Wellness ・Raise customers' health awareness, improve health conditions and contribute to the future of customers. ・Provide products that can maintain medium- to long-term relationships in preparation for the future. ・The AEON Group as
Slide 30: ESG① AFS Sustainability Policy and Materiality Map
7. Transforming business models・ AFS × ESG ESG① －AFS Sustainability Policy and Materiality Map ・Established AFS Sustainability Policy, which is the group's principle. ・Contributing to the realization of a sustainable society in the long term. ・Materiality map based on the policy. ・Identify social is
Slide 31: ESG② Pursuing happiness through innovative financial services
7. Transforming business models・ AFS × ESG ESG② －Pursuing happiness through innovative financial services ・Promote financial inclusion initiatives and reduce the disparity in financial services. Financial Inclusion Digital Bank (Malaysia) / Digital Lending (Thailand) Asset management Technology-base
Slide 32: ESG② Pursuing happiness through innovative financial services
7. Transforming business models・ AFS × ESG ESG② －Pursuing happiness through innovative financial services ・ACS Philippines creates employment opportunities through a partnership agreement with Lazada, a major e-commerce operator and delivery drivers. ・ACS Malaysia partnered with a small business ass
Slide 33: ESG③ Diversity and potential of human resources
7. Transforming business models・ AFS × ESG ESG③ －Diversity and potential of human resources ・Contributing to local communities through the implementation of financial literacy education open both internally and externally. AFS Group companies provide financial literacy education AEON Bank distribute
Slide 34: ESG③ Diversity and potential of human resources
7. Transforming business models・ AFS × ESG ESG③ －Diversity and potential of human resources ・AFS Group companies certified Health and Productivity Management in 2022. AEON Credit Service selected as one of the top 500 organizations. ・Promote Health and Productivity Management with the aim of ensurin
Slide 35: FY2022 Consolidated Financial Results and Dividend Forecasts
8. Earnings forecasts and dividend forecasts・Consolidated Financial Results and Dividend Forecasts FY2022 Consolidated Financial Results and Dividend Forecasts ・In FY2022, will implement investments to expand our business and accumulate business receivables. Expected to be at the same level as in FY
Slide 36: APPENDIX
業績ハイライト・概要 第3四半期以降の取り組み APPENDIX AEON Financial Service Co., Ltd.
Slide 37: Full Year Results by Segment
9. APPENDIX・Results by Segment Full Year Results by Segment （Unit：Billions of yen） Domestic Global Consol. Total Total Total ※1 Retail ※2 ※1 China Mekong Malay ※3 Area Area Area Solutions ※2 Operating Revenue 333.4 213.5 178.8 138.1 15.7 72.4 49.9 470.6 YoY 95％ 93％ 98％ 101％ 101％ 98％ 105％ 97％ Change
Slide 38: Full Year Profit Increase / Decrease by Area
9. APPENDIX・Factors of profit increase / decrease by Area Full Year Profit Increase / Decrease by Area Domestic Global Operating Operating Operating Operating Operating Operating Revenue Expense Revenue Expense Revenue Revenue ▲¥17.5bn ▲¥21.9bn +¥1.0bn ▲¥13.3 FY2020 FY2021 ¥40.6bn ¥58.8bn YoY ＋¥18.2
Slide 39: Full Year Results by Area: Domestic
9. APPENDIX・Results by Area Full Year Results by Area （Unit：Billions of yen） Q4(3 months) Full Year Balance of Trx YoY Compared Trx YoY receivables Increase / Increase / decrease at the decrease in the volume (Compared to the same to the last volume (Compared to the same (Before beginning of previou
Slide 40: Full Year Results by Area
9. APPENDIX・Results by Area Full Year Results by Area Diff from Diff from Diff from Cardholders Consolidated Domestic Global beginning of beginning of beginning of the FY the FY the FY Results (unit：million copies) 47.32 +1.19 30.09 +0.64 17.23 +0.55 【Domestic】 ・1.57 million new card members (YoY -0
Slide 41: Full Year Consolidated Balance Sheet
9. APPENDIX・Consolidated Balance Sheet Full Year Consolidated Balance Sheet ■For the full FY, the amount outstanding of operating receivables including operating loans, banking loans, and installment receivables increased by ¥146.4bn. The amount outstanding of allowances for bad debts decreased by ¥
Slide 42: Allowance for Doubtful Accounts and Allowance for Loss on Refund of Interest
9. APPENDIX・Allowance by Segment Full Year Allowance for Doubtful Accounts and Allowance for Loss on Refund of Interest Received by Segment （Unit：Billions of yen） Domestic FY2020 FY2021 Retail Solutions Total Beginning of Allowance for doubtful accounts, period 4.9 5.7 balance at beginning of period
Slide 43: FY2021 Global Business Performance (Yen conversion)
9. APPENDIX・Global Business Performance FY2021 Global Business Performance (Yen conversion) FY2020 FY2021 Results YoY Results YoY AEON CREDIT Revenue 1,089,858 84% 1,049,589 96% SERVICE (ASIA) Profit before tax 357,946 80% 397,973 111% (HK$’000) Profit for the period 301,575 81% 342,592 114% AEON To
Slide 44: FY2021 Global Business Performance (Yen conversion)
9. APPENDIX・Global Business Performance FY2021 Global Business Performance (Yen conversion) （Unit：Billions of yen） AEON Credit Service FY2020 FY2021 full-year (Asia) Co., Ltd. Results Results YoY Exchange rates: HKD 1 Operating income 14.9 15.0 101％ ・ FY2020 ：¥ 13.68 ・ FY2021 ：¥ 14.35 Operating prof
Slide 45: 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 — Investor Presentation (April 2022) on 6ix