Aeon Financial Service Co., Ltd. · TSE:8570
Aeon Financial Service — Q1 FY2022 Earnings Presentation
31 slides from Aeon Financial Service's earnings presentation, Jul 5, 2022
Slide 1: FY2022 First Quarter IR Presentation Materials
FY2022 First Quarter IR Presentation Materials 5 July, 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. Overview of Domestic Business 3. Overview of Global Business 4. Priority Initiatives 5. Earnings and Dividend Forecasts 6. APPENDIX AEON Financial Service Co., Ltd. 1
Slide 3: Financial Highlights
1. Financial Highlights The highlights of the consolidated results ・Consolidated results in the1Q, excluding the impact of the application of accounting standards for revenue recognition increased income and profit compared to the 1Q of FY2019 before the Covid-19 pandemic. ・In the domestic business,
Slide 4: Breakdown of operating profit in the domestic business year-on-year
２. Overview of Domestic Business Breakdown of operating profit in the domestic business year-on-year ・In the credit card business, in addition to the recovery in credit card shopping transaction volumes, the balance of revolving credit and cash advance receivables bottomed out and reversed compared
Slide 5: Expansion of the number of AEON Card members in the domestic businesses
２. Overview of Domestic Business Expansion of the number of AEON Card members in the domestic businesses ・By changing the point system, the attractiveness of credit card benefits has been improved. Re-expansion of membership at store ・In addition to the recovery in enrollment at store, the number of
Slide 6: Domestic credit card receivables
２. Overview of Domestic Business Domestic credit card receivables ・Shopping use recovers ahead of time as consumption revitalizes ・Shopping volume has recently grown by double digits yoy. Revolving credit balance expands again ・A full-fledged recovery in cash advance transaction volume is expected i
Slide 7: Transaction volume and the status of outstanding receivables of the global business
３. Overview of Global Business Transaction volume and the status of outstanding receivables of the global business China Area Mekong Area Malay Area Global Business （Hong Kong） （Thailand） ■Leveraging Group Synergies ■Promoting Digitalization ■Strengthening collaboration Introduced acquirer to all AE
Slide 8: Outstanding receivables and NPL ratio of the global business
３. Overview of Global Business Outstanding receivables and NPL ratio of the global business ・The pace of increase in operating loans and accounts receivable-installment accelerates in each area, and the outstanding balance of receivables exceeds before the Covid-19 pandemic levels ・Continued efforts
Slide 9: Transforming the business model of the global business
３. Overview of Global Business Transforming the business model of the global business ・Operating revenue increased due to recovery in transaction volume and outstanding receivables, recovering to before the Covid-19 levels ・Operating profit moves away from labor-intensive models by promoting digital
Slide 10: Priority Initiatives
業績ハイライト・概要 第3四半期以降の取り組み Priority Initiatives AEON Financial Service Co., Ltd.
Slide 11: DX Initiatives (Digital Financial Inclusion)
４. Priority Initiatives・Results in the 1Q and initiatives after the 2Q DX Initiatives (Digital Financial Inclusion) Acquired “Digital Bank” license (Malaysia) ・5 of the 29 entries were issued digital bank licenses Licensed Consortium ・Prepare for commercialization by the end of FY23 AFS Comprehensiv
Slide 12: DX Initiatives (Domestic Business)
４. Priority Initiatives・ Results in the 1Q and initiatives after the 2Q DX Initiatives (Domestic Business) Reserve investment through AEON Card settlement ・Launched credit card reserve function for the first time in Japan in a discretionary investment service ・While accumulating WAON POINT by reserv
Slide 13: Health & Wellness Initiatives
４. Priority Initiatives・ Results in the 1Q and initiatives after the 2Q Health & Wellness Initiatives Expanding real and digital insurance Full-scale development of insurance sales channels (Thailand) business (Malaysia) ・Acquisition of insurance intermediary qualification ・Achieved profitability in
Slide 14: Initiatives for post-pandemic (Global)
４. Priority Initiatives・ Results in the 1Q and initiatives after the 2Q Initiatives for post-pandemic (Global) 30th anniversary of company AEON Card WAKUWAKU issuance establishment (Thailand) started (Hong Kong) ・Since its establishment, expanded its business through ・Targeting people in 20s to 40s
Slide 15: Initiatives for post-pandemic (Domestic)
４. Priority Initiatives・ Results in the 1Q and initiatives after the 2Q Initiatives for post-pandemic (Domestic) Responding to changes in Consumer Activity Responding to the Growing Awareness of ・In addition to the demand established by the pandemic, Livelihood Defense plan to use the service in lin
Slide 16: ESG Initiatives (TCFD Compliance, External Evaluation)
４. Priority Initiatives・ Results in the 1Q and initiatives after the 2Q ESG Initiatives (TCFD Compliance, External Evaluation) Disclosures based on the Task Force on ESG External Evaluation Climate-related Financial Disclosures (TCFD) ・Promote ESG initiatives in Japan and overseas, ・Based on the TCF
Slide 17: ESG Initiatives (Domestic: Responding to inheritance and asset management needs)
４. Priority Initiatives・ Results in the 1Q and initiatives after the 2Q ESG Initiatives (Domestic: Responding to inheritance and asset management needs) Expansion of inheritance-related services Provision of asset management services ・Started handling inheritance-related business with ・Even those wh
Slide 18: FY2022 earnings forecast, dividend forecast (unchanged)
５. Earnings and Dividend Forecasts FY2022 earnings forecast, dividend forecast (unchanged) ・In FY2022, made investments to expand our business operations and accumulate operating receivables. Expected performance at the same level as FY2021 ・In view of uncertainties in the economic environment, such
Slide 19: 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 20: Impact of the application of the accounting standard on revenue recognition
６. APPENDIX Impact of the application of the accounting standard on revenue recognition ・Began applying the accounting standards for revenue recognition in the FY2022 1Q ・Due to the application of the standards, some operating revenues and operating expenses have been changed from gross notation to
Slide 21: Impact of the application of the accounting standard on revenue recognition
６. APPENDIX Impact of the application of the accounting standard on revenue recognition ・In the FY2022 1Q, domestic card shopping revenues of ¥7.6 bn and domestic e-money revenues of ¥0.5 bn were affected ・Advertising expenses also decreased by the same amount, and there was no impact on operating p
Slide 22: 1Q Results by Segment
６. APPENDIX 1Q Results by Segment （Unit：billions of yen） Domestic Global Consol. Total Solutions Total Total ※1 Retail ※2 ※1 China Mekong Malay ※2 Area Area Area ※3 Operating 68.2 41.0 42.0 38.9 4.6 20.2 14.0 106.9 Revenue YoY※4 88％ 84％ 98％ 111％ 123％ 111％ 106％ 94％ Change※4 △10.8 △9.5 △1.0 ＋3.7 ＋0.8
Slide 23: Operating profit in the domestic business
６. APPENDIX Operating profit in the domestic business (unit : billions of yen) Operating Operating Operating Profit Profit Profit FY2020 1Q +3.5 FY2021 1Q -6.3 FY2022 1Q <Operating Expenses> Promotion･Point +1.1 Personnel (Online･DX HR) +0.7 Revenue Insurance business +0.6 Expenses IT investment, Ot
Slide 24: Operating profit in the global business
６. APPENDIX Operating profit in the global business (unit : billions of yen) Operating Operating Operating Profit Profit Profit FY2020 1Q +18.5 FY2021 1Q +0.9 FY2022 1Q <Operating Revenue> Cash advance ･PL ▲2.0 Revenue Expenses Amortized receivables +1.1 times revenue Credit card +0.4 ･Installment f
Slide 25: 1Q Results by Area
６. APPENDIX 1Q Results by Area (unit : billions of yen) Balance of Increase or Transaction FYFY2021 1Q FYFY2019 1Q receivables decrease at Change from volume Compared to Compared to (Before (※) the beginning FY2021 1Q same period same period securitization) from the FY Credit card 1,694.3 109% 110%
Slide 26: Cardholders Results
6. APPENDIX Cardholders Consolidated Diff from Domestic Diff from Global Diff from beginning of beginning of beginning of the FY the FY the FY Results (unit：million copies) 47.56 +0.24 30.22 +0.13 17.34 +0.11 【Domestic】 ・0.46 million new card members (YoY +0.05 million cards ) ・15.45 million cards w
Slide 27: 1Q Consolidated Balance Sheet
６. APPENDIX 1Q Consolidated Balance Sheet ■In the FY2022 1Q, the balance of operating receivables, including operating loans, banking loans, and installment accounts receivable, increased by ¥330.4 bn. Provision for doubtful accounts increased by ¥0.9 bn 【Consolidated operating receivables balance】
Slide 28: Allowance for Doubtful Accounts and Allowance for Loss on Refund of Interest
6. APPENDIX Full Year Allowance for Doubtful Accounts and Allowance for Loss on Refund of Interest Received by Segment （Unit：billions of yen） Domestic FY2021 1Q FY2022 1Q Retail Solutions Total Beginning of Allowance for doubtful accounts, period 5.7 6.4 balance at beginning of period 5.4 53.8 58.8
Slide 29: FY2022 1Q Global Business Performance (Yen conversion)
６. APPENDIX FY2022 1Q Global Business Performance (Yen conversion) FY2021 1Q FY2022 1Q Results YoY Results YoY AEON CREDIT Revenue 254,494 86% 279,059 110% SERVICE (ASIA) Profit before tax 116,062 129% 98,324 85% (HK$’000) Profit for the period 96,963 129% 82,663 85% AEON Total Revenues 5,041,213 89
Slide 30: FY2022 1Q Global Business Performance (Yen conversion)
6. APPENDIX FY2022 1Q Global Business Performance (Yen conversion) AEON Credit Service FY2021 1Q FY2022 1Q （Unit：billions of yen） (Asia) Co., Ltd. Results Results YoY Exchange rates: HKD 1 Operating income 3.5 4.4 123％ ・ FY2021 1Q ：¥14.03 ・ FY2022 1Q ：¥15.80 Operating profit 1.6 1.5 95％ Fiscal perio
Slide 31: 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 — Q1 FY2022 Earnings Presentation on 6ix