AEON Financial Service : Fiscal 2023 For the Fiscal 2023 ended February 29, 2024

This is an abridged translation of the original Japanese document and is provided for informational purposes only. If there are any discrepancies between this and the original, the original Japanese document prevails

FY2023

IR Presentation Material

April 9, 2024

Stock Listing: Tokyo Stock Exchange, Prime Market

Code No: 8570

Contents

• FY2023 Summary of Results

• Establishment of Management Indicators

• Initiatives to enhance corporate value

• FY2024 Earnings and Dividend Forecasts Appendix

AEON Financial Service Co., Ltd.

2

The Highlights of the Consolidated Results

• Achieved the planned figures for operating revenue due to steady growth in both the Domestic and the Global transaction volume and balance of receivables.
• Increase in bad debt-related expenses in the Global business. Productivity issues in the Domestic.

Consolidated

Operating	４85.6 bn
Revenue

YoY

１０7 ％

Domestic

2９3.９ bn

YoY

１０３ ％

Global

1９３.５ bn

YoY

１14 ％

FY2023

Forecast Achieve

480.0 bn 101 ％

Operating	50.0 bn	85 ％	１１.６ bn	７２ ％	３８.２ bn	９０ ％
Profit
						Payout
Ordinary			Dividend per share
51.1 bn	83 ％		ratio
Profit
			Interim： ¥２５
Profit
attributable	20.8 bn	68 ％	Annual： ¥53			5４．7 %
to owners of	Year-end： ¥２８
parent

61.0 bn	82 ％
61.0 bn	84 ％
27.0 bn	77 ％

※As a result of the domestic business integration, the results of AEON Financial Service Co., Ltd.,

which had been included in the adjustment amount, are included in the domestic segment. YoY is calculated by reorganizing the previous year's results into the changed segments.

AEON Financial Service Co., Ltd.

3

[Domestic] Breakdown of Operating Profit

・Credit Card revenues increased due to a steady increase in receivables balance and higher merchant fees.

・Bad debt-related expenses increased due to the rising balance, but sales promotion expenses were controlled through a review of measures.

1７.1bn １６.１bn

Elimination occurs in Domestic segment due to the integration of AFS and ACS

Impact: Operating profit -1.0

FY２０２２

Installment

（Unit ： Bn JPY）

Card

sales

Securitization

Revenue

Revenue

Expense

Revenue

finance

（＋)

（ー)

Revenue

Other

Financial

＋１１.0

-１.０

-2.2

Revenue

-1.2

Expense Promotion

＋1.２

＋３.３

Bad debt

General and

＋２.７

administrative

expenses,＋３.７

１１.6bn

Operating

Operating expenses

revenue＋６.６bn

＋１０.９bn

※Excludes the impact of Felica Pocket Marketing's consolidation

FY２０２3

Main		[Operating revenue]
	・Card Revenue ＋１１.０bn
		（credit card business ＋7.8, financing ＋3.1)
factors		・Other Revenue
	Insurance ▲0.6bn

AEON Financial Service Co., Ltd.

[Operating expenses]

・Financial ＋1.２bn （Foreign exchange impact on interest expenses on foreign currency deposits, increase in interest expenses on bonds）

・Promotion ＋３.３bn （▲1.3 bｎ in 4Q accounting due to review of sales promotion measures）

・Bad debt ＋２.７bn (impact of receivables expand)

・Administrative ＋３.７bn （System operating cost ＋２.5bn、 international brand fee ＋1.3bn、(Personnel exp.＋1.５bn、insurance exp.▲１.１bn）

4

[Domestic] Cardholders and AEON Pay Status

• Reviewing enrollment policies to improve acquisition efficiency. Shifted to a cost-effective structure despite lower acquisition numbers than the previous year.
• Meanwhile, AEON Pay membership grew steadily. The number of locations where AEON Pay can be used increased to 1.95 million, compared to the target of 1.7 million.

Number of new members acquired

• Number of new cardholders: ： １.５８ million（YoY ８７%）

Number of active members

➣ 19.３million （YoY １０２%）	（Unit ： Mn）
70.0%				No. of active members in Japan
				31.49 million (diff from the

beginning of the period +0.67 mn)

Number of AEON Pay members

➣ ９.９０million（YoY １３９%）

Number of locations	FY2024
where ]AEON Pay can be used	1５.０mn

➣ １.9５million locations （YoY ２６９%）

					Feb.20２４
					９.９mn
66.0%			180		FY2024 Spring
				Oct.２０２２	「AEON Mall App」
				５.0mn	「AEON Town App」
					AEON Pay function to
					be installed
62.0%			160	Sep. 202１
2021	2022	2023		Start of service
※1： No. of cardholders who have used their cards at least once within the previous 12 months
※2： No. of active cardholders/Average number of cardholders in Domestic excluding affiliated card members×100

AEON Financial Service Co., Ltd.

5

[Domestic] Credit Card Purchase, Cash Advance Transaction Volume and Balance of Receivables

• Card shopping transaction volume increased 8% YoY due to AEON Pay promotion, etc.
• Steady increase in trade receivables balance for both revolving and installment loans and cash advances due to improved convenience such as improved application functions.

Credit Card Shopping Transaction Volume

• FY2023 results: ¥7,081.4 bn （YoY 108%）

Cash Advances Transaction Volume

• FY2023 results: ¥３7０.8 bn （YoY 110%）

Revolving and Installment Balance

• Revolving balance ¥271.4 bn （YoY 118% / YTD＋¥40.6 bn）

Ｉｎｓｔａｌｌｍｅｎｔ balance¥37.3 bn （YoY 114% / YTD ＋¥4.7 bn)

（Unit ： Bn JPY）

2,800			360	120
2,100			270	90
1,400			180	60
700			90	30
0			0	0
2020	2021	2022	2023

Cash Advances Balance

• ¥412.3 bn (YoY 104% / +¥17.0 bn)

（Unit ： Bn JPY）

			580
			480
			380
			280
			180
2020	2021	2022	2023

AEON Financial Service Co., Ltd.

6

[Domestic] Revolving・installment finance, cash advances and bad debt-related expenses

• Loan loss expense ratio to outstanding loans is stable at a low level.
• Increase the number of users by promoting usage, and increase the balance while maintaining the quality of credits by refining credit.

Revolving Credit and Installment finance Banlances(RHS)

						Cash Advance Balances(RHS)						（Unit ： Bn JPY）
12.0%						Bad Debt Related Expenses/Revolving Credit,Installment	800
						finance, Cash Advences Balances(LHS)
9.0%																																			600

6.0%			400
3.0%			200
2.0%
1.0%
0.0%			0
2020	2021	2022	2023

Number of users

➣ Revolving Credit	YoY 1０４%
Ｉｎｓｔａｌｌｍｅｎｔ finance	YoY 1０６%
Cash Advances	YoY 1０９%

Balance per capita

➣ Revolving Credit	YoY 1０５%
Cash Advances	YoY 1０８%

AEON Financial Service Co., Ltd.

7

[Domestic] Housing Loan and Asset Management Business

• Transaction volume increased 114% YoY due to the appeal of AEON SELECT CLUB benefits.
• Asset management business benefited from the launch of the new NISA as well as improved convenience through the transfer to Monex, Inc.

	Housing loan transaction volume	Asset Management Business Prospects
	➣ FY2023 results: ¥558.6 bn （YoY 114%）
	Housing loan balance（before securitization）	after the Start of the New NISA
	➣ ¥ 3,560.6 bn （＋¥240.4 bn）	※Actual results for Jan.-Feb. 20２４a

（Unit ： Bn JPY）

240		3,600
180		3,300
120		3,000
60		2,700
0		2,400
2021	2022	2023

No. of NISA

accounts

opened

YoY１６０％

Investment trust

sales

YoY２４８％

No. of mutual fund accounts opened

YoY１４４％

No. of OTC

consultations

(investment trusts)

YoY１１６％

AEON Financial Service Co., Ltd.

8

Global Business by Segment ４Q Performance Highlights

• Cumulative operating revenue is the highest ever in all three areas.
• China Area continued to increase revenues and profits, achieving record profits.

							（Unit ： Bn JPY）
	FY2023	China area	YoY	Mekong area	YoY	Malay area	YoY
	Operating revenue	30.6 bn	１36 ％	89.9 bn	１０5 ％	72.9 bn	１20 ％
	Operating profit	8.7 bn	114 ％	15.8 bn	84 ％	13.5 bn	86 ％
		6.8 bn		30.2 bn		20.3 bn
	Bad debt related	232 ％	１08 ％	135 ％
	expenses
							（Unit ： Bn JPY）
	4Q	China area	YoY	Mekong area	YoY	Malay area	YoY
	accounting period
	Operating revenue	8.4 bn	１39 ％	22.4 bn	103 ％	19.3 bn	１19 ％
	Operating profit	2.4 bn	92 ％	5.6 bn	143 ％	3.5 bn	93 ％
		2.0 bn		5.6 bn		4.3 bn
	Bad debt related	370 ％	72 ％	106 ％
	expenses
AEON Financial Service Co., Ltd.					9

[Operating Revenue]

・Credit card business +0.8 ・Financing +3.1

[Operating Expenses]

・Bad debt related exp. +2.3 ・Financial +1.5

・Personnel +1.3

・Administrative +1.2

Operating Profit ▲４.2bn

[Global] FY2023 Operating Profit Breakdown

• The main reason for the YoY decline was an increase in bad debt-related expenses in each area.
• In Malaysia, preparations for the opening of the Digital Bank in 2024 are progressing well.

China			Mekong
area	area
+1.0			▲3.1

４２.４

Revenue	Expense	Revenue	Expense
＋７.０	＋3.9
＋８.１	＋7.0

FY2022 １Q

Impact of loan reversals in Malaysia

Apprx. ３.０bn

Malay

area

▲2.2

Revenue	Expense
＋12.0
＋14.２

（Unit ： Bn JPY）

Revenue

Expense

３８.２

FY２０２２

FY２０２3

Main		[Operating Revenue]
	・Credit card business +4.0
		・Financing +3.0
factors		[Operating Expenses]
	・Bad debt related exp. +3.8
		・Financial +1.1
		・Personnel +0.5
		・Administrative +0.8

AEON Financial Service Co., Ltd.

[Operating Revenue]

・Installment finance +5.8 ・Financing +4.5

[Operating Expenses]

・Bad debt related exp. +5.2 ・Financial +2.0

・Personnel +1.8

・Administrative +1.7 ・Digital Bank +2.1

10