First Section of the Tokyo Stock Exchange
Stock Code：8570
AEON Financial Service Co., Ltd.

1

Consolidated results and business outline（Unit: Billions of yen)

Ordinary income
Ordinary expenses
Ordinary profit
Profit of securitization
receivables
Depreciation of securitization
receivables profit
Net income attributable to ownersof parent

1Q
Results

94.0
82.0
11.9
1.4
7.0

2Q

First Half of FY2017

YoY

Results

YoY

Results

YoY

+4％
+7％
-13％
-22％

100.4
83.9
16.5
4.0
1.4
10.1

+11％
+9％
+21％
+81％
+26％

194.5
165.9
28.5
4.0
2.9
17.1

+8％
+8％
+4％
-22％

【Factors contributing to difference from forecast】

Difference fromforecast

+18.5
+18.9
△0.5
-

+1％

△1.9

※Domestic total and global total represent amounts after eliminationof transactions between business segments【FY2017 1H: Record high results; Increase in consolidated income & profit for four consecutive terms.】■ Ordinary income: ¥194.5bn(YoY +8%,+¥18.5bn from forecast, +¥1.0bn due to exchange rate effect)
・Domestic: Card shopping txn vol. ¥2.3,905tn (YoY +11%) led by increase in cardholders and continued effect of reward pt sales
promotion(Shopping income +¥6.4bn). Increase in no. of active cardholders to 1.26mil (+0.03mil from start of FY2017) also led torise in cash adv. bal. to ¥320K per person（+¥5K from start of FY2017）.
・Global: Recovery of topline due to personal loans txn bal. growth (income from other loans+¥1.5bn) in Thailand, effect ofmeasures implemented in response to the new credit card and personal loan regulations.
■ Ordinary profit: ¥28.5bn(YoY +4%, -¥0.5bn from forecast, +¥0.1bn due to exchange rate effect)
・Domestic: ①Strengthening efforts for new co-branded card recruitment, Prior investments for outsourcing in initiatives for
improvement efficiency in credit screening and collection management systems. (Point expenses+¥2.4bn; Fees andcommissions+¥2.9bn, incl. of consulting fees etc. for business restructuring . ②Re-scheduling of securitization of hire purchase to
the FY2017 2H considering the level of increase in risk assets and level of shareholders’ equity ratio in light of negative interest rate.
③Bad debt exp. (+¥0.6bn), Refund of interest claims ¥0.35bn (¥0 booked in FY2016 1H), fall in refund of interest claims YoY.
・Global: Main KPIs - Personnel exp./Ordinary income: 15.0%(YoY -0.5%), Bad debt expense /Ordinary income: 24.6％(YoY -2.2%), showing favorable progress in efficiency. Share taken up by global business for consolidated income:30% (YoY -0%),
for consolidated profit: 45% (YoY +4%).
■ Net income attributable to owners of parent: ¥17.1bn(+1%, -¥1.9bn from forecast)・Deferred Tax Asset classification changed in AEON Bank since FY2016 1Q resulted in tax exp.(+¥1.1bn), Non-controllingshareholders profit(+¥0.9bn) in FY2017 1H.
・After-effect of tax in FY2017 1H due to a part of taxable exp. recorded in FY2016 (a greater portion of tax effect expected in 2H).

AEON Financial Service Co., Ltd.

2

Consolidated results of business scale
FY2016 4Q
No. of cardholders
No. of domestic➊
cardholders➋ No. of active
cardholders➌ AEON Bank
accounts
No. of AEON Card
SELECT members➍
Finance receivables

FY2017 1Q

FY2017 1H

Results

YoY

Results

Change fromstart of FY

Results

Change fromstart of FY

38.94 mil

+1.72 mil

39.35 mil

+0.41 mil

39.84 mil

+0.90 mil

26.92 mil

+10.4 mil

2,714 mil

+0.22 mil

27.39 mil

+0.47 mil

16.61 mil

+6.8 mil

1,676 mil

+0.15 mil

16.87 mil

+0.26 mil

5.55 mil+6.2 mil

569 mil+0.14 mil

5.80 mil+0.25 mil

4.08 mil+5.2 mil

421mil+0.13 mil

4.30 mil+0.22 mil+150.7bn ¥4,806.6bn+379.4bn¥4,427.2bn+569.5bn ¥4,578.0bn➊No. of domestic cardholders
・Successful cardholder recruitments efforts attributed to newco-branded cards; favorable trend in number of cardholders.
・Stable growth due to double point program at AEON stores➋No. of active cardholders
・Double point program at AEON stores led to increase incard usage
・Web statements: 4.76 mil users registered (YoY +0.6 mil,active users rate: 57% per month）⇒FY2017 1H postage cost reduced by approx. ¥1.2bn(※comparing to when paper statements are used)
・Card shopping txn vol. ¥2.390tn (YoY +11%)

AEON Financial Service Co., Ltd.

➌AEON Bank accounts
・Ordinary deposits balance: ¥1.713tn(+¥268.1bn from start of FY)
・Strengthening of wealth management service
and target increase in no. of SELECT members
from FY2017 2H➍Finance receivables(incl. securitization)
・Growth in housing loans balance and hirepurchase contracts balance in domestic
Domestic:¥4.3073tn (+¥346.0bn from start ofFY)
Global: ¥504.3bn)＋¥33.3bn)

3Results by segment
Domestic total(Unit：
Billions of yen） ※Ordinary income
YoY

ChangeOrdinary profit
YoY

ChangeOrdinary profit ratio

YoY

135.0
+8％
+9.8
15.6
+6％
+0.9
11.6％
△0.2ptGlobal total

RetailSolutions

85.2
+4％
+3.5
2.9
-47％
△2.6
3.5％
△3.4pt

83.4
+6％
+4.7
14.1
+15％
+1.7
16.9％
+1.3pt

※

58.8
+8％
+4.2
12.9
+22％
+2.3
22.0％
+2.7ptChina
Area

Mekong
Area

Malay
Area

9.4
-0％
+0
2.9
+24％
+0.5
30.8％
+5.9pt

29.9
+7％
+1.9
5.3
+24％
+1.0
17.9％
+2.4pt

19.3
+13％
+2.2
4.6
+20％
+0.7
24.2％
+1.5ptAdjustments

Total

△33.0

194.5
+7％
+13.5
28.5
+4％
+1.1
14.7％
△0.5pt

-3％
+1.0
△1.5
+32％
△0.3
-

※ Domestic total and global total represent amounts after elimination of transactions between business segments➊Domestic main factors ※（ ）YoY

➋Global main factors ※( ) YoY【Retail】【China Area：↑profit for ACS(A)*】・Interest income（+¥4.0bn: Cash adv.+¥2.2bn, Other loans +¥1.7bn）, ・Personnel expenses/Ordinary income：15.1％(-1.4pt）
Profit of securitization receivables of housing loan（-¥2.4bn）
・Bad debt allowance/Ordinary income：18.2％(-3.9pt）
・Fees and commissions payment (+¥1.4bn), Expenses related to【Mekong Area：↑income ↑ profit for AEONTS*】
reward point program（+¥2.4bn）
・AEONTS: Strong receivables growth due to credit usage【Solutions】
enhancement strategy for personal loans
・Personnel expenses/Ordinary income： 14.8％（+0.6pt）
・Card shopping revenue （+¥3.3bn）, Installment sales income
・Bad debt allowance/Ordinary income： 25.3％（-3.7pt）（+¥7bn）
・Investment towards operational efficiency, credit screening and【Malay Area：↑income ↑profit for ACS(M)*】management（+¥1.5bn）
・Amortization expenses（+¥0.8bn）, Advertising expenses excluding
・ACSM: Key initiatives include e-money and strengtheningof cooperation with AEON Malaysia
point program expenses（-¥1.1bn）
・Bad debt expenses（+¥0.3bn）, Refund of interest claims（+¥03bn）
・Personnel expenses/Ordinary income： 15.3％（-1.5pt）
・Starting from 10/1, AEON Bank in-store branches will be directly
・Bad debt allowance/Ordinary income： 26.5％（+0.5pt）
managed by AEON Bank. Integration of HQ functions will also takeplace. Topline recovery led by the above restructuring initiatives is*in local currency
expected from 2H.

AEON Financial Service Co., Ltd.

4

Domestic/Global segment results by graph (Domestic)
Ordinary income+3.57

Ordinary Income+4.73

・Growth of revo. & installment bal. ・Rise in card txns
Card shopping income +3.32
Credit card income+3.64
Creditguarantee fee+1.16･Rise in housing loan bal.
Loan income+1.75
・Rise in hire purchase contracts
receivables
・Management of hire purchase
Hire purchase contracts income +0.74
contracts receivables※APF=(※sale from APF→ABK)・Fall in e-money txns
AEON Product Hire purchase contracts income +0.89 Processing agency service fee ▲0.74
Finance・Securitization income ▲2.49
・Securitization income +1.32※ABK=(Housing loan)（auto-loan, studio condominium loan）
AEON Bank ・Other income
▲0.22
▲1.07
・Other income

Domestic

Ordinary
Profit
FY2016 1H¥14.72bn-¥2.68bn+¥1.79bn・Expenses related to double
point program
Advertising expenses+2.72
・Rise in finance receivables
Payment guarantee fee +1.63
Bad debt expenses+0.29
・Expenses for project related todirect management of AEON
Bank branches
Personnel expenses+0.49
・Investments in IT/digitalization
Amortization expenses +0.49
・Other expenses+0.63

・Expenses related to increasing
labor productivity
Commissions paid
+1.89
・Investments in systems/IT
Amortization expenses +0.82
・Strengthening B2B sales
Personnel expenses +0.42
・Expenses related to businessexpansion
Bad debt expenses+0.38
・Shift towards point promotion
Advertising expenses ▲1.48
・Other expenses+0.91

Ordinary Expenses

Ordinary Expenses

リテール
RetailAEON Financial Service Co., Ltd.

+6.25

ソリューション
Solutions

Adjustments to income +1.17
・Fees and commissions +0.91
・Other operating income +0.16
・Other income+0.10+¥1.84bn
・Fees and commissions ▲0.93
・General and admin. exp. +0.10
・Other expenses▲0.07

Ordinary
Profit
FY2017 1H

15.67bn
YoY＋¥0.95bn

Adjustments to expenses▲9.0+2.94
その他・調整Other
adjustments

5

Domestic/Global segment results by graph (Global)
Global

Details
concerning thethree listedcompanies

Ordinary income +0.02
・Txn growth mainly at AEON
stores due to favorable response
to promotional campaigns related
to new services
Shopping income+0.35
Cash adv. income+0.24・Stricter credit screening
Loan income▲0.14
・Bad debt recovery, otherincomeOther income▲0.43

Ordinary income +1.98
・Co-branded card with Big C
Credit card income +0.88
・Personal loan growth due torise in usage of member card
Loan income+0.87
・Bad debt recovery, otherincomeOther income+0.23+¥1.02bn+¥0.56bn

Ordinary
Profit・Promotion of sales at AEON
storesAdvertising expenses +0.1

FY2016 1H・Stricter credit screening
Bad debt expenses▲3.6
Personnel expenses ▲1.3
▲0.2
Interest expenses
Other expenses▲0.4¥10.58bn・cardholder recruitment withBig C tie-up
Advertising expenses +0.45
Personnel expenses+0.45
Fees and commissions +0.33
Other expenses+0.25

Ordinary income +2.20
・Rise in use of hire purchase forsmall bikes
Hire purchase contracts income +0.99
・Promotion of personal loan usage
Loan income+0.86
Credit card income
Other income+¥0.78bn
・Rise in finance receivables
Bad debt expenses+0.68
Interest expenses+0.33
・Investments in brand prepaid
Fees and commissions +0.10
Other expense+0.30

・Better credit management
process
Bad debt expense▲0.53

Ordinary
Profit
FY2017 1H¥12.96bn
YoY＋¥2.38bn

Ordinary expenses ▲5.4

Ordinary expenses +9.5

Ordinary expenses +14.1

中華圏
China Area

メコン圏
Mekong

マレー圏
Malay Area

AEON Financial Service Co., Ltd.

+0.20
+0.15

6

Consolidated balance sheet
Change fromstart of FY

Topics ※（）:Change from start of FY

487.2

-47.4

Loan and bills discounted*

3,051.3+293.9・Domestic balance：¥453.0bn（-¥52.0bn）→increase due to favorable trend in credit card txns

Accounts receivable –installment *1,622.5+98.5

Allowance for doubtful
accounts

-52.5

-2.1

Other Assets

666.9

+11.0

Total assets

4,482.4+295.1

Deposits

2,814.2+272.1

764.0

+4.9

2.3

-1.4

Other liabilities

488.7

+7.5

Total liabilities

4,069.2＋283.1

Consolidated results

Results（Unit：Billions of yen）

Cash and deposits

Interest-bearing debt
Allowance for loss on refundof interest received

１

Total equity
Total liabilities and equity
Shareholders’ equity ratio(domestic standard)

413.1

+11.9

4,482.4+295.1（※）

8.60％

AEON Financial Service Co., Ltd.

+0.01pt・Domestic balance：¥2.783tn（+¥273.5bn）→unsecured loan：¥524.1bn（+¥16.6n）,
in which cashing：¥445.4bn（+¥13.7bn）※Housing loan（incl. securitization）：¥1,502tn (+¥94.5bn）

・Global balance：¥272.4bn（+¥20.3bn）
・Domestic balance ：¥1.390tn（+¥85.5bn）→increase in card shopping and installment sales
・Global balance：¥231.8bn（+¥13.0bn）→increase in card shopping and installment sales

・Customers’ liabilities for acceptance andguarantees：¥124.9bn（-¥13.7bn）
・Securities：¥212.0bn (+¥41.3bn)
・Ordinary deposits：¥1.713tn（+¥268.0bn）
・Time deposits：¥1.102tn（+¥5.3bn）
・Domestic balance ：¥360.5bn（-¥8.7bn）→Long-term loans payable：¥23.9bn（+¥4.3bn）
Shift to ordinary deposits continues

・Global balance：¥403.4bn（-¥13.7bn）
・Increase attributed by reduction of risk assets*: Amounts does not include securitization

7

Improve profitability of asset ~capital efficiency by securitization~■Improvement of yield and duration gap as well as compression of risk asset through funding by securitization■Make use of low-cost funding available from AEON Bank and sale to external investors depending on level ofbalance of finance receivables and market interest rate situation■Increase in risk asset by ¥100.0bn is prevented, led by effect from compression of risk asset (-¥150.0bn) .
※Securitization process in FY2017 1H

AEON Housing Loan
Servicesecuritization

・Compression of risk assets
Studio-condo: ¥12.6bn/¥0.9bn
Auto: ¥28.0bn/¥1.1bn

Studio condominium
loan
Balance: ¥110.9bn

・Compression of risk assets
・Improvement of duration gap（incl. securitization）

Housing loan: ¥124.8bn/¥1.8bn

AEON Product Finance
Reform: ¥26.0bn / -(Elimination of intra-company txn)
Auto : ¥18.6bn / -(Elimination of intra-company txn)
Auto-loan, Reform loan
Balance: ¥339.5bn（incl. securitization）

funding・Improvement of yield・Improvement of duration gap

Details in
represent the ratio of Securitization
amount in 1H/Resulting effect on profit

External investors
Sale to external investors depending
on level of finance receivables andmarket interest rate situation

AEON Bank【Asset】【Liability】

Low yield・Long duration

Deposits

Housing loan
Bal: ¥1,502.5bn（incl. securitization）

Bal: ¥2,818.0bn
・Low yield・Short duration

High yield・Medium duration
Investment
Bal: ¥1,160.8bn【Equity】※Balance is as of end September 2017

AEON Financial Service Co., Ltd.

8

Summary：Domestic business■Favorable growth in shopping transactions, rise in cardholders attributed to recruitment efforts through new cobranded cards: Positive trend expected to continue from 2Q onwards. New promotional efforts targeted atincreasing cardholders and shopping transactions will be implemented from 2H.
2016
3Q

4Q

1Q

2017
2Q

Forecast
for FY2017

1Q

2Q

Shopping txn growth rate（YoY）+8.1％+9.4％ +11.6％ +10.7％ +11.2％ +10.1％ +10.7％

New cardholders growth rate（compared with FY2017 1Q）△0.3％ △10.4％ △1.8％ △4.5％ △3.6％ +27.3％※

New

Wealth management,
Target at younger
若年層・首都圏開拓
generation and Greater Tokyo
Monthly investment type NISA, iDeCo
Investment seminars
by external
professionals

Existing

Market (Customers)

新市場開拓：資産形成
Entryinto new markets：

KojimaCard：Initiatives implemented from 1Q

多角化：コト消費へのシフト
Diversification：
Shift towards consumers

Minions CardTGC Card

Promotion of card recruitment andusage through emphasis on experiencerather than goods

AEON Bank’s
10th Anniversary
promotions

Opening of
Small-sized
branches

新事業開拓：最新のIT技術の活用
Newbusiness：Newest technology

Market penetration: Settlements
Double points program （for cash payments）
Promotion of switch towards Debit/SELECT Cardtargeted at younger customers, AEON Groupcustomers

Existing

Promotion of smartphone applications（AEON WALLET, passbook app、LINE）

New
Business/Service

AEON Financial Service Co., Ltd.

9

Summary: Global business■Expansion of business scope in Hong Kong, Thailand, Malaysia (with listed companies) in local currency■Initiatives for stricter credit screening and credit management led to control of bad debt expenses（billions of yen）

350
35
300
30
250
25
200
20
15
150
10
100
5
50
0

Ordinary income
Personnel expenses
Bad debt expenses¥29.9bn
Bad debt expenses/Finance Receivables

7.5%
7.0%

¥26.7bn

6.5%

6.7%

6.0％

6.0%

¥4.0bn¥4.5bn¥7.3bn¥7.2bn

5.5%
5.0%

1Q

2Q
3Q
FY2016

KPI

4Q

1Q
2Q
FY2017FY2016【Ordinary income】
・Recovery of bottom line since FY2016 2Q
continues
・Refinement of credit processes in Hong Kongand the implementation of credit usage
enhancement strategy in Thailand in response to
the credit card and loan regulations led toincrease in transaction volume.
【Bad debt allowance】
・Bad debt expenses to consolidated financereceivables rate:
Improvement and peak since FY2016 2Q
continues
FY2017 2Q rate: 6.0%
(YoY -0.7pt, -0.1pt since FY2017 1Q)

FY2017FY2018

FY

1Q

2Q

1H

Consolidated ordinary income（YoY）

+ 4％

+4％

+11％

Bad debt expenses/Ordinary income（Global）

26％

25％

Personnel expenses/Ordinary income（Domestic）（Global）

17%
15%

18%
15%

AEON Financial Service Co., Ltd.

Forecast
for FY

Forecast
for FY

+ 8％

+ 4％

+ 10％

24％

25％

23％

20％

16%
15%

17%
15%

15%
13%

16%
11%

10

Future Direction

AEON Financial Service Co., Ltd.

11

Our Vision “Asia’s No. 1 Retail Financial Service Company■ Improve convenience and access to financial products and services by utilizing the latest IT technology■ More proactive efforts in approaching customers as existing financial institutions are unable to provide
sufficient services■ Matching the various lifestyle needs of customers starting from financial needs
Improve access to
products & services

Eco-system

Life Style

Needs

Customers

ＡＦＳ

ＡＦＳ

Matching(Channel)Use of
Database & AI

Improvement of
products & services

AEON Financial Service Co., Ltd.

Co-development of financial
products & services

Merchants& Partnercompanies

Products & Services related to lifestyle

Life Stage12

Progress and schedule in IT/System investment
Objective

Effect‘Investment amount and main areas ofinvestment in FY2017 2Q

Investment amount and main areas ofinvestment in FY2017 (planned)

Domestic¥10.0bn

Domestic¥25.5bn
・Store renewal
・Digitalization of
branches・ATM replacement
・24H ATM

Improvecorrespondence level（strength in proposal,
speed）
Improveconvenienc
e and laborproductivity

Improve
profitabilityof asset

Respond to customer’s
financial needs,
anytime, anywhere

・Improve collection
efficiency
・Reduction of credit
risk・Refine screening

AEON Financial Service Co., Ltd.

Global¥1.0bn・Development andupdate of mobile app
・Issuance of e-money
・Development of new
products

・Voice recognition
system・Development ofscoring system

Global¥3.5bn・Next generation credit
card system
・Shift towards
paperless loan andcredit card applications
by using tablets

・Development andupdate of mobile app
・Introduction of mobile
payment service
・Digital marketing

・Building a process fortarget collections
・Introduction of SAS
system: Improvement ofscreening system,
analysis ability ofcustomer credit, sales
promotion

13

Main initiatives from
FY2017 2H■ Improvement of convenience and labor productivity■ Improvement of asset profitability■ Re-growth of global business

AEON Financial Service Co., Ltd.

14

Improvement of convenience and labor productivity■ Enhance digitalization efforts at point of touch with customers
・Instantaneous approach towards each and every customer through the AEON Wallet app
・Improving efficiency through digitalization i.e. smartphone function allows checking of advertisements andpersonal data in replacement of flyers and paper-based promotions, statements

Innovation by digitalization
MediumPosters

Direct-mailStatements

AEON Wallet

Customer
reach

Mass

Segment

Detailed
response to
specific
segments

Frequency

Low

Medium

High

Cost

High

High

Low

Preparationtime

Medium

Long

Short

Environment

Fall in no.
of news
readers

Rise inpostage cost

Rise in use ofsmartphones

AEON Financial Service Co., Ltd.

Use of smartphone
Real time productinformation
Product recommendations
based on needs
Completeness of payment
functions
Addition of household
account book function
Addition of communication
function

15

Strengthen marketing efforts■ Provide convenient and useful information to customers by strengthening alliance with merchants and the useof the latest IT technology■ Encourage more customers to shop at AEON stores through promotions targeted at individual customer needs
by collaborative analysis with merchants

AFS

Merchants

Customers

AFS
Database
AFS Channel
MarketingNewest IT
technology

IT vendors,
Start-ups etc
AEON Financial Service Co., Ltd.

・Strengthening cross-channel selling/promotion
through AEON Wallet, stores, DM, Web・Timely sales promotion to suit the needs of eachindividual customer
・Collaborative analysis with merchants ⇒ Plan ⇒Implementation

16

Improvement of asset profitability and labor productivity■ Increase sales of products/services thus asset profitability through direct management of AEON Bank branches
・All branch employees can now provide full-line services(※): more time for one-on-one customer consultation,
thus higher level of sales is expected ※ previously, employees working in AEON Bank agency branches did not possess the required
license to handle asset management queries

No. ofbranches
Types of branches

Sales amount（FY2016）

No. ofbranches～ 2017/9/30

AEON Bank direct branch
AEON Bank agency branch（incl. asset management
services）
AEON Bank agency branch（excl. asset management
services）

32

2017/10/1 ～Investment: ¥93.0bn

18

Housing loan: ¥1,490.0bn-

Improvement areas

138
Investment: ¥200.0bn

Insurance: ¥12.0bn

88

Expected sales
amount （FY2019）--

Insurance: ¥25.0bn
Housing loan:¥2,170.0bn

・Acquisition ofsales license
・Training program
to help employees
upgrade sales skills■ Integration of domestic HQ functions
・ Increase operational efficiency and labor productivity by reassigning personnel to strategic investment divisions
Nov
2017
Carefulexaminationof target
areas forintegration

Enhance efficiency of middle andback-office functions

Dec
2017

・Finance and accounting departments,
planning departments of the various groupcompanies are integrated
・Increase automation and efficiency ofoperations through use of robotics, outsourcing
and elimination of work duplication

AEON Financial Service Co., Ltd.

Creation of
spare capacity
30% reduction inpersonnel
compared with
pre-integration of
HQ functions

Mar
2018

strategic investment
divisionsRe-assignment of
personnel to overseas
subsidiaries, functions
related to developmentof merchants networketc

17Re-growth of global business■Expansion towards new customer segments, use of smartphone app
China Area

Mekong Area

Malay Area

Differentiation by card
recruitment and usage
promotion, renovation of
branches focused on “Japan”

・Auto loan business・Co-branded card with Big C・Acquisition of point cardcustomers・Insurance for staff of AEON
group

From
now

Hong Kong: Emphasis on
Gold cardThailand: Start of automobileloans business

Malaysia: Issuance of platinum
card

Now

Gold card

Thai Airways card

Gold card

From
now

Hong Kong: Card design withpopular characters

Mobile app

Malaysia: Start sales of
insurance

Now

Credit card

Credit card

Credit card

From
now

‐

Cambodia: e-money in Riel

Malaysia: e-money

Now

Loan

Loan, Hire-purchase

Loan, Installment financeTarget areas for
improvement
Customersegment

Upper-middle

MiddleLow

Possible areasof expansion

UPPER
MIDDLE

MobilePayment

MobileWalletLoyalty
ProgramSmartphone app users

LOW

AEON Financial Service Co., Ltd.

18

Forecast of Results for FY2017■ Domestic：Sustainable growth of card shopping transaction volume and improve
productivity through integration of HQ functions■ Global：Expansion of topline by new business and controlling bad debt allowance

FY2017
Forecast

YoY

Ordinary profit¥390bn
¥65bn

+4.0％
+5.5％

Net income attributable toowners of parent

¥40bn

+1.4％

Ordinary income（Net income per share）
Interim
第2四半期末Plan

Dividend
forecast

¥29

YoY
±¥0

（¥185.43）
Year End
Forecast

¥39

YoY
±¥0

Full Year
Forecast¥68

Payout Ratio

YoY

Forecast±¥036.7% +0.9%

YoY

・Commemorative dividend “¥2” on previous fiscal year is replaced by the dividend

AEON Financial Service Co., Ltd.

19

AEON Thana Sinsap Thailand
FY2017 1H Initiatives

AEON Financial Service Co., Ltd.

20

Consolidated results and business outline
1H
Results

YoY /ChangeCredit card

27,434+16%

Personal Loan

19,246

-17%

Other

3,333

+19%

Transaction Volume Total 50,012+10%

Total Revenue

8,930

+2%

3,908

+6%

2,286

-10%

1,135

-2%

Total Expense

7,329

-1%

Profit before income tax

1,599

+16%

Credit Card

31,738+3,027

Personal Loan

37,556+1,729

Other

1,451

-139

Finance Receivables

70,745+4,617

Other Asset

5,697

-813

Total Asset

76,442+3,804

Consolidated （Unit：THB Mil）

Operating and administrative
expenses
Bad debts and doubtful
accounts
Other

AEON Financial Service Co., Ltd.

Topics・Issuing new co-branded card with a major
hyper-market and revising customer credit
screening led transaction volume high・New card aquitition:36mil（YoY+7%）
・Other income：350MB（YoY+12%）、
Bad debt recovery：290MB（YoY+23%）
・Advance investment for Promoting Big C
・Issue : Improving personnel cost ratio andbusiness operation efficiency
・Improved bad debts and doubtful accounts
amount by reviewing standard for credit
screening・Credit card receivables increased sharply
by issuing co-brand card, reviewing credit
and economic recovery.
・Promote development of online apps andimprovement efficiency by performing
reorganize unprofitable stores
21

Key Initiatives 1 – New customer acquisition■ Issuing co-brand card with major hyper market “Big C” in May 2017
・Set card recruitment counter s at our branch and 131 Big C stores
・Acquisition of customer in 1H：113K（Target+14%）■Start immediate issuance card at Big C and our counters and stores【Credit Card】【Member Card】
AEON Financial Service Co., Ltd.

【Card recruitment counter at Big C】
22

Key Initiatives 2 – Optimization of credit cost
■Improved provision of allowance for doubtful accounts due to continued
reviewing of standard of screening■Improved ratio of account receivable from 3 months up【 account receivable】【 Credit Cost】【Billion
Baht】
5 50

営業収益（左軸）

Revenue
貸倒引当金繰入額（左軸）Bad debts and doubtful accounts
貸倒引当金繰入額／営業収益（右軸）
Ratio【Billion
Baht】
80
35.0% 800

Ratio(3months up)
延滞3ヵ月以上債権比率（右軸）
3.3%

31.4%

4 40

営業債権残高（左軸）Account receivables

3.0%
60
600

3.0%

29.4%
28.6%

2.9%

30.0%

2.7%

3 30

26.0%

26.2%

2.5%

40
400

2.5%

25.0%

2 20

2.0%
25.0%
20
200

1 10

0%

‐

20.0%
Ｑ１

Ｑ２

Ｑ３

Ｑ４

２０１６年

AEON Financial Service Co., Ltd.

Ｑ１

Ｑ２

２０１７年

0%

‐

1.0%
Ｑ１

Ｑ２

Ｑ３

２０１６年

Ｑ４

Ｑ１

Ｑ２

２０１７年

23

Future direction

AEON Financial Service Co., Ltd.

24

Expansion of customer base
■Provide financial service that match customer income■Strengthen efforts to card-less by adding member card function on mobile app
Customer segment

More than
Bt30K

Our Service

・Credit card
(Platinum / Gold)・Processing
Monthly
incomeMore than
Bt15K

Less than
Bt15K

・Virtual card
・Mobile apps

Auto
Finance・Member card
・Mobile apps
【Mobile App】

Improve
Profitability

・Integration of collection division and expansion of servicer business・Staff distribution through reorganizing branches
・Reinforce cross selling insurance and auto finance etc

AEON Financial Service Co., Ltd.

25

Initiatives at Cambodia■E-money
・Eliminating inconvenience of usage of KHR
by promoting national currency distribution
・Planning to provide Settlement / Remittanceservice by mobile app in Phnom where
account for 10 percent of personal
consumption.
Settlement■Collaboration with MGS Co.
・Provide loans to people rejected fromscreening due to income and credit throughIoT devices to remote control of engine
start/off
・Providing more employment opportunities
IoT devices

Balance
Confirmation
Pass
screening

ChargeRemittance
Sales
Promotion

・Rejected fromscreening・Having a solvency( Mass Layer)
No solvency

AEON Financial Service Co., Ltd.

Remote control ofenginestart/offTaxi association
Repayment
guarantee

・Provide loans
to purchasetaxies・Provide more
employment
opportunities
26

(Reference) FY2017 1H Results (Hong Kong, Thailand, Malaysia)
FY2016 1H
Results
AEON
CREDITSERVICE(ASIA)(HK$’000)
AEON
THANA
SINSAP(THAILAND)(BAHT’000)
AEON
CREDITSERVICE(M) Berhad(RM$’000)

FY2017 1H

YoY

Results

YoY

659,189
185,576-1%+26%652,213
210,796-1%+14%

152,142+27%

173,784+14%

Total Revenues

8,780,053-

8,929,642+2%

Profit before income tax
expense1,376,390-

1,599,297+16%

Net profit for the period

1,097,266-

1,295,004+18%

Revenue + Other
operation income

583,351+16%

671,651+15%

Profit before taxation

157,291+12%

197,662+26%

Profit for the period

117,921+26%

147,197+25%

Total Revenue (※2)
Profit before tax
Profit for the period
attributable to :Owners of the Company※1 Source: Data released by each company. Figures for Hong Kong and Thailand are consolidated.
※2 Total Revenue = Interest income + Other operating income + Recoveries of advances and receivables written-off

AEON Financial Service Co., Ltd.

27

(Reference) 1H FY 2017 Results (Hong Kong, Thailand, Malaysia)■ Consolidated Results of AEON Credit Service (Asia) Co., Ltd.
FY 2016 1H
Results

FY 2017 1H
Results

9.2
2.5
2.1

Ordinary income
Ordinary profit
Net income

YoY

9.3
3.0
2.4

+5%
+16%
+17%

Exchange rates: HKD 1・FY2016 1H：¥13.98
・FY2017 1H：¥14.29
Fiscal period
・2016：Mar. 1～Aug. 31
・2017：Mar. 1～Aug. 31■ Consolidated Results of AEON THANA SINSAP (THAILAND) PLC.
FY 2016 1H
Results

FY 2017 1H
Results

29.2
4.5
3.6

Ordinary income
Ordinary profit
Net income

YoY

29.2
5.2
4.2

∓0%
+14%
+16%

Exchange rates: THB 1
・ FY2016 1H ：¥3.08
・ FY2017 1H ：¥3.27
Fiscal period
・2016：Mar. 1～Aug. 31
・2017：Mar. 1～Aug.31■ Results of AEON Credit Service (M) Berhad
FY 2016 1H
Results

Ordinary income
Ordinary profit
Net income

FY 2017 1H
Results

15.0
4.0
3.0

YoY

17.2
5.0
3.7

+14%
+25%
+24%

Exchange rates: MYR 1
・ FY2016 1H ：¥26.89
・ FY2017 1H ：¥25.71
Fiscal period
・2016：Mar. 1～Aug. 31
・2017：Mar. 1～Aug. 31(Unit:Billions of yen)

AEON Financial Service Co., Ltd.

28

(Reference) Allowance for Doubtful Accounts and Allowance for Loss on
Refund of Interest Received by Segment■ Allowance for Doubtful Accounts (by Segment)
RetailSolutions

Domestic
Total

Allowance for doubtful accounts,
beginning of period¥1.8bn¥33.7bn¥35.5bn

Provision of allowance for doubtful
accounts¥0.2bn¥9.2bn¥9.4bnWrite-off of doubtful accounts(including transferred debt)¥0.0bn¥7.9bn¥8.0bnAllowance for doubtful accounts,
end of period¥1.9bn¥35.0bn¥37.0bn（Subsidiaries in domestic） Aeon Credit Service：¥29.4bn, Aeon Bank：¥2.0bn,
Aeon Product Finance：¥4.4bn, Aeon Housing Loan Service：¥1.6bn

China Area Mekong Area Malay Area

■ Allowance for Loss on Refund ofInterest Received
FY2016 1H

FY2017 1H¥4.2bn¥3.8bnProvision-¥0.3bnInterest
refunded¥2.0bn¥1.8bnEnd of period¥2.1bn¥2.3bnBeginning of
period(Interest claims amount :Cash out + principal payout)

GlobalTotal

Consolidated

Allowance for doubtful accounts,
beginning of period¥1.7bn¥8.4bn¥4.3bn¥14.5bnl¥50.3bn

Provision of allowance for doubtful
accounts¥1.7bn¥7.5bn¥5.1bn¥14.4bn¥24.0bn

Write-off of doubtful accounts(including transferred debt)¥2.0bn¥7.2bn¥4.5bn¥13.8bn¥21.8bn

Allowance for doubtful accounts,
end of period¥1.4bn¥8.8bn¥4.9bn¥15.2bn¥52.5bn

AEON Financial Service Co., Ltd.

29

(Reference) FY 2017 Business Plan (Domestic)
FY 2017 1H
Results
Number of cardholders

27.39milResults
Card shopping transaction volume2,390.5bn

Results

FY 2017

Change fromstart of FY

Plan

YoY

+0.47mil

28.00mil+1.08mil

YoY

Plan

YoY

+10.6％

5,000.0bn+10.7％Plan

YoY

Change fromstart of FY

Balance of cash advances¥445.4bn+¥13.7bn¥460.0bn+¥28.3bn

Balance of small consumer loans¥78.6bn+¥2.8bn¥90.0bn+¥14.1bn¥524.1bn+¥16.6bn¥550.0bn+¥42.4bn

Balance of unsecured loans

AEON Financial Service Co., Ltd.

30

(Reference) Definition of “Adjustments” based on presentation format
Brief Report
RetailSolutions

China

MekongMalay

Adjustment
amounts

Total

Includes HQ/Shared function companies, transactions between business segments

FACT BOOK≪Operating Segment Performance≫ P.8 (FY2017 1H)
Domestic
Total

GlobalRetailSolution

Adjustment transaction
between Retail and Solution

Total

China

MekongMalay

Adjustment
amounts

Consoli
dated
Total

Adjustment transaction between
China, Mekong and Malay Area

Includes HQ/Shared function companies, transactions between business segments≪Financial Summary in Domestic≫ P9－13 (FY2017 1H)
Domestic
Domestic business unit

Includes transactions between Domestic business unit and AFS.
Dividends from overseas subsidiaries are not eliminated.

AEON Financial Service Co., Ltd.

31

Statements contained in this report with respect to the Company’s
management strategies, business policies and results forecasts are forwardlooking statements about the future performance of the Company, which are
based on the assumptions and beliefs in light of the information currently
available. These forward-looking statements involve various uncertain
factors including known and unknown risks such as economic trends,
industry competition, market demand, exchange rates, tax and othersystems that may cause the Company’s actual results, performance or
achievements to differ materially from the expectations expressed herein.

AEON Financial Service Co., Ltd.

32