Slide 1: Management Report FY 2006
May 19 2006 Management Report FY 2006 Credit Saison Co., Ltd CORPORATE STRATEGY CREDIT SAISON CO., LTD. AGENDA Financial Report for FY 2005 Recent Market Conditions and Status of the Company Management Policy ~ Medium-term Management Plan~ Management Strategy for FY 2006 The figures contained in thi
Slide 2: Highlights of FY 2005
Financial Report for FY 2004 Overview of Business Highlights Operating Results Credit Risk Trends Financial Indices Main Indices (Non-Consolidated) CORPORATE STRATEGY CREDIT SAISON CO., LTD. 2 Highlights of FY 2005 Non-consolidated Consolidated First and Second ,Third Quarter Start of operation at n
Slide 3: Highlights of FY 2005 / Financial Results
Highlights of FY 2005 Non-consolidated Consolidated Fourth Quarter Merger with UC CARD Co., Ltd. (card issuance business); Credit Saison begins new era Started issuing “olinas SAISON Card” AMEX brand added to “Mizuho Mileage Club Card SAISON” Alliance with Toyota Financial Services Securities Corpor
Slide 4: Results by Business Segment
Results by Business Segment Units: Billion yen % Operating revenues Operating income FY2004 FY2005 change FY2004 FY2005 change Credit & Finance Entertainment Real estate L e a s e O t h e r s T o t a l Inter-group transactions Consolidated CORPORATE STRATEGY CREDIT SAISON CO., LTD. 6 Contribution to
Slide 5: Operating Revenues and Ordinary Income
Operating Revenues Credit Saison generated double-digit growth on both a consolidated and non-consolidated basis because of expansion in the credit card and consumer loan businesses and solid performance in the real estate business. Consolidated Non-Consolidated Unit: Billion yen Unit: Billion yen e
Slide 6: Net Income and Credit Risk Trends
Net Income Consolidated earnings for fiscal 2005 increased substantially because of one-time factors including the lump-sum amortization of UC Card trademarks and gain on sale of shares resulting from Atrium’s public offering. Consolidated Non-Consolidated Unit: Billion yen Unit: Billion yen 3.2 b 9
Slide 7: Credit Risk Trends: Write-offs and Credit Costs
Credit Risk Trends *Write-off rate: Amount of receivables written off during the year as a percentage of Trend of Write-offs total receivables at the end of the period. Consolidated Non-Consolidated Cash advances write-off rate Total credit card write-off rate Shopping write-off rate CORPORATE STRAT
Slide 8: Financial Indices and Funding Structure
Financial Indices Ratings Security Maintain a stable ratio of shareholders’ equity to total assets. R&I A+ Profitability Achieve the medium-term target of 10% for consolidated S&P A ROE. Fitch A Consolidated Non-Consolidated Shareholders’ equity ratio Shareholders’ equity ratio CORPORATE STRATEGY CR
Slide 9: Funding Structure and Main Indices
Funding Structure Long-term/Short-term Debt Ratio and Fixed Ratio Consolidated Non-Consolidated CORPORATE STRATEGY CREDIT SAISON CO., LTD. 16 Main Indices Non-Consolidated ( )=YOY FY2005 Actual FY2006 Target New applications 3.22 million (133%) 4.00 million(124%) New cards issued 2.71 million (130%)
Slide 10: New Applications and Cardmembers
New applications & New cards issued Work toward new card applications for the combined SAISON and UC brands at a scale of 4 million annually. Units: Million Applications Cards issued 0 ,00 ,00 0 810 YOY 780 YOY % 133 124 % 0 ,00 ,00 0 620 YOY 690 YOY % 129 125 % CORPORATE STRATEGY CREDIT SAISON CO.,
Slide 11: Transaction Volume and Credit Loans Outstanding
Transaction volume Substantial growth of 40% in card shopping and cash advance transaction volume resulting from the integration with UC Card. Billion yen Shopping Cash advances Y YO % 140 Y YO % 119 Y Y YO YO % % 140 121 CORPORATE STRATEGY CREDIT SAISON CO., LTD. 20 Credit loans outstanding 7% annu
Slide 12: Growth of the Credit Card Market
Recent Market Conditions and Status of the Company Growth of the Credit Card Market Changes of the Japanese Credit Card Market in Japan Reorganization of the Credit Card Industry CORPORATE STRATEGY CREDIT SAISON CO., LTD. 22 Growth of the Credit Card Market Comparison of Credit Card use in Personal
Slide 13: Changes in the Japanese Credit Card Market
Changes in the Japanese Credit Card Market Industry Share in 2002 FY 2005 Projected CS CS Other Other Capital alliance partners: Sum of LAWSON CS Card, Inc., Idemitsu Credit Co., Ltd., Resona Card Co., Ltd. and Takashimaya Credit Co., Ltd. Close Partners: Companies using the brand, etc. Group: Total
Slide 14: 5-Year Summary of Major Indices (Reference)
5-Year Summary of Major Indices (Reference) ( )=YOY Qualitative Main Indices Quantitative Evaluation Evaluation FY2000 FY2005 Card applications Progress toward the challenging goal of Total cardmembers leading the industry with a market share of Active cardmembers 30%. (Consolidated) Operating reven
Slide 15: Share of the Credit Card Market in Fiscal 2005
Share of the Credit Card Market in Fiscal 2005 (Reference) Frequently used department store cards, UC Cards with their high per-card spending, and premium cards will contribute to growth in transaction volume. Share of Total Cardholders Card Shopping Transaction volume share SAISON Affinity SAISON S
Slide 16: Management Philosophy
Management Philosophy Leading-edge Service Provider Contribute to Stakeholders Progressive If we create customer satisfaction, Take on new challenges. Continue to innovate. and…. Avoid complacency. Scientific …mutually beneficial relationships Implement leading-edge technologies and latest with busi
Slide 17: Expanding of the Operating Foundations
Expanding of the Operating Foundations Time Frame :April 2006 March 2011 Credit Card Business Credit Card Issuing Business Capital Alliances and Leverage Affinity Card Business Infrastructure and Expertise Leverage Brand and Disperse Asset Portfolio Customer Base Leverage Brand, Expertise and Custom
Slide 18: Management Target
Management Target Take qualitative and quantitative approaches to become the number-one finance company Objective: Increase cumulative total of new cards issued by 25 Expand million during the period of the medium-term management plan cardholder base *Including cards of capital and business alliance
Slide 19: Branding Strategies
Branding Strategies STRATEGY IMAGE FUNCTION Differentiating the SAISON CARD brand within the credit card industry. GOOD IMPRESSION PROFITABILITY CREDIBILITY Corporate Identity Promotion during Fiscal 2006 Use soccer superstar “Ronaldinho” Ronaldinho” Become to the number- number-one company in the c
Slide 20: 11-Division Organization (Perfect 11)
11-Division Organization (Perfect 11) Maximize the benefits of integrating the SAISON and UC brands through cooperation among 11 divisions Aggressive 5 (Quintet) The SAISON brand is strong among individuals, the UC brand is strong among corporations. 1. Sales Division Generate benefits from the inte
Slide 21: Challenge to the Number One Credit Card Company
Challenge to the Number One Credit Card Company Respond to diversifying customer needs and strengthen existing businesses. At the same time, strengthen the operating foundation through mergers, acquisitions and alliances that enhance Credit Saison’s strengths, as exemplified by the UC brand. Operati
Slide 22: Challenge into the New Financial Markets
Challenge into the New Financial Markets Mizuho Financial Group Network Utilize the network of Mizuho Financial Group Cooperate in sales with the Mizuho Financial Group to approach large customer companies in the Mizuho Financial Group that Credit Saison previously had no contact with Leverage UC Co
Slide 23: Impact of Systemic Reform and Retail Loan Market
Impact of Factors Including Systemic Reform Gray Zone Interest Interest Refund Claims AGAINST FOLLOW Credit Saison Market Earnings Decline Due to Lower Increase mergers and acquisitions of Interest Rates small and medium- medium-sized market participants Interest rate reduced to 24% Elimination of t
Slide 24: Capital Alliance Credit Card Companies
Contribution of Capital Alliance Credit Card Companies Group objective: Raise number of new cards issued annually to the 5 million level! LAWSON Idemitsu Resona Takashimaya CS Card Credit Card Credit Operations Finance Retailer Convenience Store Gas Station Branch Department Store Network 7,600 Netw
Slide 25: Innovation of the Personnel Systems
Innovation of the Personnel Systems B.Q I.Q E.Q S.Q A Personnel System that Takes into Account Shortfalls in Human Resources Resulting from Economic Recovery Secure sensitive and excellent people -Aggressively scout for mid-career professionals who are highly adaptable and have specialized capabilit