Credit Saison Co., Ltd. · TSE:8253
Credit Saison — H1 FY2023 Earnings Presentation
39 slides from Credit Saison's earnings presentation, Nov 10, 2023
Slide 1: Financial Results Briefing for the First Half of FY2023
Financial Results Briefing for the First Half of FY2023 November 10,2023 Credit Saison Co.,Ltd. Securities Code: 8253
Slide 2: Agenda
Growth Story P.4 From Transformation to Growth P.28 Approaches to Realize Management with Awareness of Capital Costs and the P.8 Global Share Price P.16 Payment P.29 Shareholder Returns and Dividends P.21 Finance P.24 Group company AGENDA Overview of Financial Results for the First Half of FY2023 P.
Slide 3: Growth Story
Growth Story
Slide 4: Aiming for more than 100.0 billion yen in business profit
As all Group companies move forward with transformation, we aim to achieve more than 100.0 billion yen in business profit ■Changes in Business Profit Approx. 3 times 70.0 billion yen Consolidated Non- consolidated FY19 FY20 FY21 FY22 FY23 (Plan) Medium- 4 term goal
Slide 5: From Transformation to Growth
From Transformation to Growth Portfolio Transformation ✓ Promote diversification of businesses that do not rely on the payment business Aim for more than 100.0 Growth of global finance affiliates billion yen in business profit ✓ Review strategy for payment business Regrowth Develop more “muscular” b
Slide 6: Main Points of the Regrowth Phase
Main Points of the Regrowth Phase 01 Accelerate global business growth Aim for more than 100.0 billion yen in business profit 02 Increase competitiveness of the payment business and finance business Regrowth phase 03 Pursue synergies with banks and other finance functions 04 Realize management with
Slide 7: Overall Image of Regrowth Phase
Overall Image of Regrowth Phase *Details will be announced in the new Medium-term Management Plan (May 2024) Global business Domestic business Growth investment Reinvestment of profit Group Company Payment Mexico India Affluent Thailand segment Vietnam ・ Singapore SME Indonesia CVC Brazil Finance Ex
Slide 8: Global Business Strategy
Global Business Strategy 01 Steadily grow into third pillar of business Increase scalability of India business to 02 drive acceleration of global business expansion 03 Launch business in current fiscal year in Brazil and Mexico with aim to create a second India 8
Slide 9: Status of Global Business Expansion
Status of Global Business Expansion ✓ Expansion of both lending business and investment business into 7 countries based on the theme of “(Fin)Tech-led INNOVATION and INCLUSION” ■India > Promote enhancement of direct lending in addition to lending in partnership with Fintech and accelerate business e
Slide 10: Changes in Business Profit
Changes in Business Profit ✓ The lending business, including India, is generally progressing in line with the initial plan ✓ Steadily solidify foundation for further dramatic growth in the future (100 million yen) 100 90 90 80 70 60.9 60 50 40 40 17.5 30 20 10 0 FY22-2Q FY23-2Q FY22 FY23 Medium-term
Slide 11: Credit Saison India
Credit Saison India Global ✓ Outstanding loans increased steadily to over 140.0 billion yen ✓ Aim to build up to 600.0 billion yen by 2026 while diversifying business lines （100 million yen） 6,000 First step Second step 4,000 “Direct lending” by Credit Saison India 2,000 Branch lending First step Em
Slide 12: Credit Saison India
Credit Saison India ✓ Shift weight from lending based on the partnership model that has driven business expansion so far to direct lending with high scalability and build solid foundation through strategy of business line diversification Wholesale lending/partnership lending Direct lending to indivi
Slide 13: Future Growth Driver - Direct Lending Strategy
Future Growth Driver - Direct Lending Strategy Embedded finance -Acquire individual customers through partnership strategy Branch lending - Lend to SMEs using branches ✓ Embed Credit Saison India’s lending service ✓ Provide lending services that meet the need in apps and other services provided by n
Slide 14: Strengths of Credit Saison India
Strengths of Credit Saison India Construction of a data-backed model for Credit granting/setting credit creditlimits granting/setting credit limits Strategic financing and risk management Construction of model for credit granting/setting credit limits and implementation of risk Secured interest rate
Slide 15: Full-Scale Expansion of Latin America Business
Full-Scale Expansion of Latin America Business ✓ Apply the India business model against backdrop of world-class economic growth and presence of Fintech ecosystem ✓ Promote business with cross-national “One Team” for future expansion in terms of both sales and organization Promote construction of fou
Slide 16: Payment Business Strategy
Payment Business Strategy Expand from mass market (individuals) into 01 the affluent segment/corporate (sole- Payment proprietors and SMEs) market Improve “earning 02 From general cards to premium cards power” 03 Aim to increase fee-based revenue 16
Slide 17: Basic Concept to Improve Earning Power
Basic Concept to Improve Earning Power Aim to maximize Things that will accelerate revenue and profit future growth Continue ✓ Promote utilization of well- strengthening the established customers foundation ✓ Pursue Group synergies ✓ Increase fee-based revenue Strengthen fee- Target strategy based b
Slide 18: Expanding the Affluent Segment and Corporate Market
Aim to Expand the Affluent Segment and Corporate (sole- proprietors and SMEs) Market ✓ Membership structure reforms have expanded the high-unit price/high-activity customer base. ■ Card shopping ■ Changes in the breakdown ■ Changes in the breakdown of customer spending of new issuances card shopping
Slide 19: Shift to premium cards
Shift to premium cards ✓ Promote premium cards as the main cards through a shift from general cards to premium cards ✓ Further expansion of high unit price customer base by continuing to promote shift to premium cards ■ Customer spending before and ■ Changes in share of members spending ■ Percentage
Slide 20: Increase Fee-based Revenue
Increase Fee-based Revenue ✓ Continue promoting various measures aimed at stable expansion ■ Changes in card shopping ■ Changes in cash advance balance ■ Other fees (annual fees) revolving balance Aim for all-time high Move away from trend of decline Contribute to profit through steady balance towar
Slide 21: Finance Business Strategy
Finance Business Strategy Aim for further growth phase by expanding 01 business domains through entry into secured business in addition to the traditional non-secured business Finance Finance 02 Expand from personal loan products to products for business people, seniors, and corporations Transition
Slide 22: Expansion of Guarantee Business
Expansion of Guarantee Business 1985 1st Step Expand non-secured guarantee business (non-secured personal loan guarantees) Partner financial Launched institutions 2nd Step Upgrade of relationships with partner financial institutions business Individual (payment product referrals, etc.) Sole- proprie
Slide 23: Growth of Real Estate Finance Business
Growth of Real Estate Finance Business ◼ Expansion of products in real estate finance business 2023 2013: Asset Formation Loan Saison Asset Formation Loan Premier 2003: Mortgage loans 2016: Leaseback Expansion of products for business people, 1994: PJ Loan seniors, and corporations Transition to ope
Slide 24: Group company
Group company Pursue synergies between payment/finance Group Affiliates Company businesses operating in Japan and financial functions including banks ¥ Bank Asset Management Financial Planning Servicer 24
Slide 25: Bank - Progress of Alliance with Suruga Bank
Bank - Progress of Capital and Business Alliance with Suruga Bank <Direction being pursued> Collaborative 2023 November October 2023 Collaboration Development of new, competitive products and new customers development of the real through the collaboration of the two companies in the mortgage busines
Slide 26: Asset Management
Asset Management × <Percentage of customers by investment trust profit/loss <January 2024> (other businesses)> No. 1 99.5% (Percentage of customers) Release new online transaction smartphone app Company A Start offering “Invest by Card” for members of Company B credit cards issued by Credit Saison *
Slide 27: Financial Planning / Servicer
Financial Planning / Servicer Financial Planning Servicer Pursue Group synergies from “loan × expansion” to “loan collection” as the Credit Saison Group June 2023 Credit card receivables, etc. Application of equity method = Strengthen collaborationin affluent Expand “unsecured” Real estate finance a
Slide 28: Management with Awareness of Capital Costs and the Share Price
Details will be announced in the Approaches to Realizing Management with Awareness of Capital new Medium-term Management Costs and the Share Price Plan (May 2024) Components in enhancement of corporate value Priority measures ✓ Improve the “earning power” of existing Profit growth businesses ✓ Expan
Slide 29: Shareholder Returns and Dividends
Shareholder Returns and Dividends ✓ Medium-term Management Plan target for 70.0 billion yen in business profit expected to be achieved a year ahead of schedule ✓ Suruga Bank became an affiliated company accounted for by the equity method (July 3, 2023) Upward revision of full-year business results f
Slide 30: Overview of Financial Results for the First Half of FY2023
Overview of Financial Results for the First Half of FY2023
Slide 31: Financial Results Digest
Financial Results Digest Net revenue ✓ Revenue increase due to the expansion of the lending business in our global business in addition to the strong performance in our payment business and finance business Business profit ✓ Profit increased due to growth in our finance business (contribution to pro
Slide 32: 1H Results & Full-Year Business Results Forecast
1H Results & Full-Year Business Results Forecast (100 million yen) FY23 FY23 2Q FY22 FY23 Forecast YoY Initial Revised Progress 2Q 2Q Difference forecast forecast rate (100 million 1,751 3,620 Consolidated Net revenue 1,573 111.3% 3,560 60 48.4% yen) Business profit 393 398 101.2% 700 700 ー 56.9% Pr
Slide 33: Overview of Business Results by Segment
Overview of Business Results by Segment Net revenue Business (100 million yen) FY22 FY23 FY22 profit FY23 YoY YoY 2Q 2Q 2Q 2Q Payment 1,072 1,149 107.2% 108 101 92.9% Lease 60 62 104.3% 26 23 89.1% Finance 251 285 113.6% 109 122 111.8% Real estate related 123 130 105.6% 77 116 150.4% Global 45 101 2
Slide 34: Contribution by Consolidated Companies
Contribution by Consolidated Companies ■Business profit Difference (100 million yen) Consolidated Non-consolidated Difference Business profit Ordinary Profit FY23-2Q 398.1 235.6 162.4 (Year-on-year difference) +4.6 +0.7 +3.8 ■Contribution by Consolidated Companies (100 million yen) Contribution Year
Slide 35: Main Changes in Consolidated Business Profit/Non-consolidated Ordinary Profit
(100 million yen) 35 235 results Reduced non-operating -7 income ■ Non-consolidated Ordinary Profit Main Changes in Consolidated Business Profit/Non-consolidated Ordinary Profit -8 Increased financial expenses Increased other operating -29 expenses -41 Increased credit costs 87 Increased operating r
Slide 36: Credit Risk
Credit Risk ✓ While delinquency over 90 days remains low, provisions have been increased with an eye to the future to address uncertainties going forward Delinquency over 90 days(consolidated) Delinquency over 90 days(non-consolidated) 5.0% 5.0% 4.0% Credit card Cash advances 4.0% 2.63% 2.57% 2.78%
Slide 37: Interest Repayment Claims
Interest Repayment Claims Additional provision of ¥13.6 billion on the consolidated basis and ¥12.7 Level of provision adequate at Monitoring future trends billion on the nonconsolidated basis in present FY 2021 ■No. of new claims and price per claim (monthly average) ■Balance of provision for loss
Slide 38: 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 60% June 2017 10 billi
Slide 39: ESG/External Evaluations and Information on Various Reports
ESG/External Evaluations (updates) Information on Various Reports ESG Indices adopted by GPIF ✓ Late December 2023 (planned) Publication of Credit Saison Integrated Report 2023 ✓ Selected for the first time for FTSE BLOSSOM JAPAN SECTOR RELATIVE INDEX composed of Japanese companies *To be published